Correlation Between Braskem SA and EastGroup Properties
Can any of the company-specific risk be diversified away by investing in both Braskem SA and EastGroup Properties 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 EastGroup Properties 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 EastGroup Properties, you can compare the effects of market volatilities on Braskem SA and EastGroup Properties 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 EastGroup Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and EastGroup Properties.
Diversification Opportunities for Braskem SA and EastGroup Properties
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Braskem and EastGroup is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and EastGroup Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EastGroup Properties 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 EastGroup Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EastGroup Properties has no effect on the direction of Braskem SA i.e., Braskem SA and EastGroup Properties go up and down completely randomly.
Pair Corralation between Braskem SA and EastGroup Properties
Considering the 90-day investment horizon Braskem SA Class is expected to generate 2.67 times more return on investment than EastGroup Properties. However, Braskem SA is 2.67 times more volatile than EastGroup Properties. It trades about 0.23 of its potential returns per unit of risk. EastGroup Properties is currently generating about 0.27 per unit of risk. If you would invest 378.00 in Braskem SA Class on November 9, 2024 and sell it today you would earn a total of 78.00 from holding Braskem SA Class or generate 20.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braskem SA Class vs. EastGroup Properties
Performance |
| Timeline |
| Braskem SA Class |
| EastGroup Properties |
Braskem SA and EastGroup Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and EastGroup Properties
The main advantage of trading using opposite Braskem SA and EastGroup Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, EastGroup Properties 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 EastGroup Properties will offset losses from the drop in EastGroup Properties' long position.| Braskem SA vs. Valhi Inc | Braskem SA vs. Huntsman | Braskem SA vs. Lsb Industries | Braskem SA vs. Westlake Chemical Partners |
| EastGroup Properties vs. Terreno Realty | EastGroup Properties vs. Plymouth Industrial REIT | EastGroup Properties vs. LXP Industrial Trust | EastGroup Properties vs. First Industrial Realty |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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