Correlation Between Braskem SA and Kuraray
Can any of the company-specific risk be diversified away by investing in both Braskem SA and Kuraray 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 Kuraray 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 Kuraray Co, you can compare the effects of market volatilities on Braskem SA and Kuraray 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 Kuraray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Kuraray.
Diversification Opportunities for Braskem SA and Kuraray
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Braskem and Kuraray is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and Kuraray Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuraray 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 Kuraray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuraray has no effect on the direction of Braskem SA i.e., Braskem SA and Kuraray go up and down completely randomly.
Pair Corralation between Braskem SA and Kuraray
Considering the 90-day investment horizon Braskem SA Class is expected to generate 0.78 times more return on investment than Kuraray. However, Braskem SA Class is 1.27 times less risky than Kuraray. It trades about 0.18 of its potential returns per unit of risk. Kuraray Co is currently generating about 0.07 per unit of risk. If you would invest 384.00 in Braskem SA Class on October 23, 2024 and sell it today you would earn a total of 33.00 from holding Braskem SA Class or generate 8.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Braskem SA Class vs. Kuraray Co
Performance |
| Timeline |
| Braskem SA Class |
| Kuraray |
Braskem SA and Kuraray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and Kuraray
The main advantage of trading using opposite Braskem SA and Kuraray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, Kuraray 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 Kuraray will offset losses from the drop in Kuraray's long position.| Braskem SA vs. Valhi Inc | Braskem SA vs. Huntsman | Braskem SA vs. Lsb Industries | Braskem SA vs. Westlake Chemical Partners |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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