Correlation Between Braskem SA and Mativ Holdings
Can any of the company-specific risk be diversified away by investing in both Braskem SA and Mativ Holdings 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 Mativ Holdings 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 Mativ Holdings, you can compare the effects of market volatilities on Braskem SA and Mativ Holdings 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 Mativ Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Mativ Holdings.
Diversification Opportunities for Braskem SA and Mativ Holdings
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Braskem and Mativ is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and Mativ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mativ Holdings 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 Mativ Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mativ Holdings has no effect on the direction of Braskem SA i.e., Braskem SA and Mativ Holdings go up and down completely randomly.
Pair Corralation between Braskem SA and Mativ Holdings
Considering the 90-day investment horizon Braskem SA Class is expected to under-perform the Mativ Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Braskem SA Class is 2.23 times less risky than Mativ Holdings. The stock trades about -0.34 of its potential returns per unit of risk. The Mativ Holdings is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 1,610 in Mativ Holdings on August 28, 2024 and sell it today you would lose (208.00) from holding Mativ Holdings or give up 12.92% 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. Mativ Holdings
Performance |
| Timeline |
| Braskem SA Class |
| Mativ Holdings |
Braskem SA and Mativ Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and Mativ Holdings
The main advantage of trading using opposite Braskem SA and Mativ Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, Mativ Holdings 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 Mativ Holdings will offset losses from the drop in Mativ Holdings' long position.| Braskem SA vs. Huntsman | Braskem SA vs. AdvanSix | Braskem SA vs. Celanese | Braskem SA vs. Green Plains Renewable |
| Mativ Holdings vs. Orion Engineered Carbons | Mativ Holdings vs. Select Energy Services | Mativ Holdings vs. Perimeter Solutions SA | Mativ Holdings vs. FutureFuel 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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