Correlation Between Braskem SA and Hawkins
Can any of the company-specific risk be diversified away by investing in both Braskem SA and Hawkins 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 Hawkins 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 Hawkins, you can compare the effects of market volatilities on Braskem SA and Hawkins 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 Hawkins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Hawkins.
Diversification Opportunities for Braskem SA and Hawkins
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Braskem and Hawkins is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins 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 Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of Braskem SA i.e., Braskem SA and Hawkins go up and down completely randomly.
Pair Corralation between Braskem SA and Hawkins
Considering the 90-day investment horizon Braskem SA Class is expected to under-perform the Hawkins. In addition to that, Braskem SA is 1.27 times more volatile than Hawkins. It trades about -0.03 of its total potential returns per unit of risk. Hawkins is currently generating about 0.13 per unit of volatility. If you would invest 6,100 in Hawkins on August 26, 2024 and sell it today you would earn a total of 6,903 from holding Hawkins or generate 113.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braskem SA Class vs. Hawkins
Performance |
| Timeline |
| Braskem SA Class |
| Hawkins |
Braskem SA and Hawkins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and Hawkins
The main advantage of trading using opposite Braskem SA and Hawkins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, Hawkins 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 Hawkins will offset losses from the drop in Hawkins' long position.| Braskem SA vs. Huntsman | Braskem SA vs. AdvanSix | Braskem SA vs. Tronox Holdings PLC | Braskem SA vs. Celanese |
| Hawkins vs. H B Fuller | Hawkins vs. Minerals Technologies | Hawkins vs. Quaker Chemical | Hawkins vs. Oil Dri |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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