Correlation Between Braskem SA and Collective Mining
Can any of the company-specific risk be diversified away by investing in both Braskem SA and Collective Mining at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Braskem SA and Collective Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Braskem SA Class and Collective Mining, you can compare the effects of market volatilities on Braskem SA and Collective Mining and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Braskem SA with a short position of Collective Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Collective Mining.
Diversification Opportunities for Braskem SA and Collective Mining
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Braskem and Collective is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and Collective Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collective Mining and Braskem SA is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Braskem SA Class are associated (or correlated) with Collective Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collective Mining has no effect on the direction of Braskem SA i.e., Braskem SA and Collective Mining go up and down completely randomly.
Pair Corralation between Braskem SA and Collective Mining
Considering the 90-day investment horizon Braskem SA Class is expected to under-perform the Collective Mining. But the stock apears to be less risky and, when comparing its historical volatility, Braskem SA Class is 1.11 times less risky than Collective Mining. The stock trades about -0.02 of its potential returns per unit of risk. The Collective Mining is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 277.00 in Collective Mining on September 4, 2024 and sell it today you would earn a total of 83.00 from holding Collective Mining or generate 29.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 38.46% |
| Values | Daily Returns |
Braskem SA Class vs. Collective Mining
Performance |
| Timeline |
| Braskem SA Class |
| Collective Mining |
Braskem SA and Collective Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and Collective Mining
The main advantage of trading using opposite Braskem SA and Collective Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, Collective Mining can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Collective Mining will offset losses from the drop in Collective Mining's long position.| Braskem SA vs. Valhi Inc | Braskem SA vs. Huntsman | Braskem SA vs. Lsb Industries | Braskem SA vs. Westlake Chemical Partners |
| Collective Mining vs. SNDL Inc | Collective Mining vs. Axalta Coating Systems | Collective Mining vs. Suntory Beverage Food | Collective Mining vs. Thai Beverage PCL |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
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