Correlation Between Braskem SA and Empresa Distribuidora
Can any of the company-specific risk be diversified away by investing in both Braskem SA and Empresa Distribuidora 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 Empresa Distribuidora 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 Empresa Distribuidora y, you can compare the effects of market volatilities on Braskem SA and Empresa Distribuidora 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 Empresa Distribuidora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Empresa Distribuidora.
Diversification Opportunities for Braskem SA and Empresa Distribuidora
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Braskem and Empresa is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and Empresa Distribuidora y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empresa Distribuidora 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 Empresa Distribuidora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empresa Distribuidora has no effect on the direction of Braskem SA i.e., Braskem SA and Empresa Distribuidora go up and down completely randomly.
Pair Corralation between Braskem SA and Empresa Distribuidora
Considering the 90-day investment horizon Braskem SA Class is expected to under-perform the Empresa Distribuidora. But the stock apears to be less risky and, when comparing its historical volatility, Braskem SA Class is 1.23 times less risky than Empresa Distribuidora. The stock trades about -0.05 of its potential returns per unit of risk. The Empresa Distribuidora y is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,175 in Empresa Distribuidora y on September 3, 2024 and sell it today you would earn a total of 2,877 from holding Empresa Distribuidora y or generate 244.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braskem SA Class vs. Empresa Distribuidora y
Performance |
| Timeline |
| Braskem SA Class |
| Empresa Distribuidora |
Braskem SA and Empresa Distribuidora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and Empresa Distribuidora
The main advantage of trading using opposite Braskem SA and Empresa Distribuidora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, Empresa Distribuidora 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 Empresa Distribuidora will offset losses from the drop in Empresa Distribuidora's long position.| Braskem SA vs. Valhi Inc | Braskem SA vs. Huntsman | Braskem SA vs. Lsb Industries | Braskem SA vs. Westlake Chemical Partners |
| Empresa Distribuidora vs. Centrais Electricas Brasileiras | Empresa Distribuidora vs. Enel Chile SA | Empresa Distribuidora vs. Korea Electric Power | Empresa Distribuidora vs. Genie Energy |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Commodity Directory Find actively traded commodities issued by global exchanges |