Correlation Between Braskem SA and Barrick Gold
Can any of the company-specific risk be diversified away by investing in both Braskem SA and Barrick Gold 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 Barrick Gold 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 Barrick Gold Corp, you can compare the effects of market volatilities on Braskem SA and Barrick Gold 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 Barrick Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Barrick Gold.
Diversification Opportunities for Braskem SA and Barrick Gold
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Braskem and Barrick is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and Barrick Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick Gold Corp 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 Barrick Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrick Gold Corp has no effect on the direction of Braskem SA i.e., Braskem SA and Barrick Gold go up and down completely randomly.
Pair Corralation between Braskem SA and Barrick Gold
Considering the 90-day investment horizon Braskem SA Class is expected to under-perform the Barrick Gold. In addition to that, Braskem SA is 1.17 times more volatile than Barrick Gold Corp. It trades about -0.32 of its total potential returns per unit of risk. Barrick Gold Corp is currently generating about -0.14 per unit of volatility. If you would invest 2,070 in Barrick Gold Corp on August 26, 2024 and sell it today you would lose (248.00) from holding Barrick Gold Corp or give up 11.98% 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. Barrick Gold Corp
Performance |
| Timeline |
| Braskem SA Class |
| Barrick Gold Corp |
Braskem SA and Barrick Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and Barrick Gold
The main advantage of trading using opposite Braskem SA and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, Barrick Gold 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 Barrick Gold will offset losses from the drop in Barrick Gold's long position.| Braskem SA vs. Huntsman | Braskem SA vs. AdvanSix | Braskem SA vs. Tronox Holdings PLC | Braskem SA vs. Celanese |
| Barrick Gold vs. Agnico Eagle Mines | Barrick Gold vs. Pan American Silver | Barrick Gold vs. Wheaton Precious Metals | Barrick Gold vs. Kinross Gold |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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