Correlation Between Braskem SA and Kaiser Aluminum
Can any of the company-specific risk be diversified away by investing in both Braskem SA and Kaiser Aluminum 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 Kaiser Aluminum 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 Kaiser Aluminum, you can compare the effects of market volatilities on Braskem SA and Kaiser Aluminum 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 Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Kaiser Aluminum.
Diversification Opportunities for Braskem SA and Kaiser Aluminum
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Braskem and Kaiser is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum 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 Kaiser Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaiser Aluminum has no effect on the direction of Braskem SA i.e., Braskem SA and Kaiser Aluminum go up and down completely randomly.
Pair Corralation between Braskem SA and Kaiser Aluminum
Considering the 90-day investment horizon Braskem SA Class is expected to under-perform the Kaiser Aluminum. In addition to that, Braskem SA is 1.21 times more volatile than Kaiser Aluminum. It trades about -0.03 of its total potential returns per unit of risk. Kaiser Aluminum is currently generating about 0.07 per unit of volatility. If you would invest 5,618 in Kaiser Aluminum on August 26, 2024 and sell it today you would earn a total of 2,547 from holding Kaiser Aluminum or generate 45.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braskem SA Class vs. Kaiser Aluminum
Performance |
| Timeline |
| Braskem SA Class |
| Kaiser Aluminum |
Braskem SA and Kaiser Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and Kaiser Aluminum
The main advantage of trading using opposite Braskem SA and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, Kaiser Aluminum 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 Kaiser Aluminum will offset losses from the drop in Kaiser Aluminum's long position.| Braskem SA vs. Huntsman | Braskem SA vs. AdvanSix | Braskem SA vs. Tronox Holdings PLC | Braskem SA vs. Celanese |
| Kaiser Aluminum vs. Century Aluminum | Kaiser Aluminum vs. China Hongqiao Group | Kaiser Aluminum vs. Constellium Nv | Kaiser Aluminum vs. Alcoa Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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