Correlation Between Braskem SA and FTAI Aviation
Can any of the company-specific risk be diversified away by investing in both Braskem SA and FTAI Aviation 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 FTAI Aviation 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 FTAI Aviation Ltd, you can compare the effects of market volatilities on Braskem SA and FTAI Aviation 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 FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and FTAI Aviation.
Diversification Opportunities for Braskem SA and FTAI Aviation
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Braskem and FTAI is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation 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 FTAI Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTAI Aviation has no effect on the direction of Braskem SA i.e., Braskem SA and FTAI Aviation go up and down completely randomly.
Pair Corralation between Braskem SA and FTAI Aviation
Considering the 90-day investment horizon Braskem SA Class is expected to under-perform the FTAI Aviation. In addition to that, Braskem SA is 2.54 times more volatile than FTAI Aviation Ltd. It trades about -0.02 of its total potential returns per unit of risk. FTAI Aviation Ltd is currently generating about 0.05 per unit of volatility. If you would invest 2,121 in FTAI Aviation Ltd on August 27, 2024 and sell it today you would earn a total of 629.00 from holding FTAI Aviation Ltd or generate 29.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 87.3% |
| Values | Daily Returns |
Braskem SA Class vs. FTAI Aviation Ltd
Performance |
| Timeline |
| Braskem SA Class |
| FTAI Aviation |
Braskem SA and FTAI Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and FTAI Aviation
The main advantage of trading using opposite Braskem SA and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, FTAI Aviation 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 FTAI Aviation will offset losses from the drop in FTAI Aviation's long position.| Braskem SA vs. Huntsman | Braskem SA vs. AdvanSix | Braskem SA vs. Tronox Holdings PLC | Braskem SA vs. Celanese |
| FTAI Aviation vs. Ryder System | FTAI Aviation vs. Air Lease | FTAI Aviation vs. Vestis | FTAI Aviation vs. Willis Lease Finance |
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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