Correlation Between Braskem SA and Everest
Can any of the company-specific risk be diversified away by investing in both Braskem SA and Everest 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 Everest 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 Everest Group, you can compare the effects of market volatilities on Braskem SA and Everest 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 Everest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Everest.
Diversification Opportunities for Braskem SA and Everest
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Braskem and Everest is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and Everest Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everest Group 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 Everest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everest Group has no effect on the direction of Braskem SA i.e., Braskem SA and Everest go up and down completely randomly.
Pair Corralation between Braskem SA and Everest
Considering the 90-day investment horizon Braskem SA Class is expected to under-perform the Everest. In addition to that, Braskem SA is 1.06 times more volatile than Everest Group. It trades about -0.46 of its total potential returns per unit of risk. Everest Group is currently generating about 0.01 per unit of volatility. If you would invest 38,566 in Everest Group on August 24, 2024 and sell it today you would lose (51.00) from holding Everest Group or give up 0.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braskem SA Class vs. Everest Group
Performance |
| Timeline |
| Braskem SA Class |
| Everest Group |
Braskem SA and Everest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and Everest
The main advantage of trading using opposite Braskem SA and Everest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, Everest 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 Everest will offset losses from the drop in Everest's long position.| Braskem SA vs. Valhi Inc | Braskem SA vs. Huntsman | Braskem SA vs. Lsb Industries | Braskem SA vs. Westlake Chemical Partners |
| Everest vs. Axalta Coating Systems | Everest vs. Shake Shack | Everest vs. Braskem SA Class | Everest vs. Bt Brands |
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.
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