Correlation Between Braskem SA and Orbia Advance
Can any of the company-specific risk be diversified away by investing in both Braskem SA and Orbia Advance 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 Orbia Advance 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 Orbia Advance, you can compare the effects of market volatilities on Braskem SA and Orbia Advance 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 Orbia Advance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Orbia Advance.
Diversification Opportunities for Braskem SA and Orbia Advance
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Braskem and Orbia is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and Orbia Advance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbia Advance 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 Orbia Advance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbia Advance has no effect on the direction of Braskem SA i.e., Braskem SA and Orbia Advance go up and down completely randomly.
Pair Corralation between Braskem SA and Orbia Advance
Considering the 90-day investment horizon Braskem SA Class is expected to generate 14.68 times more return on investment than Orbia Advance. However, Braskem SA is 14.68 times more volatile than Orbia Advance. It trades about 0.18 of its potential returns per unit of risk. Orbia Advance is currently generating about -0.22 per unit of risk. If you would invest 400.00 in Braskem SA Class on November 3, 2024 and sell it today you would earn a total of 64.00 from holding Braskem SA Class or generate 16.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braskem SA Class vs. Orbia Advance
Performance |
| Timeline |
| Braskem SA Class |
| Orbia Advance |
Braskem SA and Orbia Advance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and Orbia Advance
The main advantage of trading using opposite Braskem SA and Orbia Advance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, Orbia Advance 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 Orbia Advance will offset losses from the drop in Orbia Advance's long position.| Braskem SA vs. Valhi Inc | Braskem SA vs. Huntsman | Braskem SA vs. Lsb Industries | Braskem SA vs. Westlake Chemical Partners |
| Orbia Advance vs. Solvay SA ADR | Orbia Advance vs. Dow Inc | Orbia Advance vs. Shin Etsu Chemical Co | Orbia Advance vs. First Graphene |
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 CEOs Directory module to screen CEOs from public companies around the world.
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