Correlation Between Braskem SA and Orla Mining
Can any of the company-specific risk be diversified away by investing in both Braskem SA and Orla Mining 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 Orla Mining 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 Orla Mining, you can compare the effects of market volatilities on Braskem SA and Orla Mining 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 Orla Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Orla Mining.
Diversification Opportunities for Braskem SA and Orla Mining
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Braskem and Orla is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and Orla Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orla Mining 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 Orla Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orla Mining has no effect on the direction of Braskem SA i.e., Braskem SA and Orla Mining go up and down completely randomly.
Pair Corralation between Braskem SA and Orla Mining
Considering the 90-day investment horizon Braskem SA Class is expected to under-perform the Orla Mining. But the stock apears to be less risky and, when comparing its historical volatility, Braskem SA Class is 1.07 times less risky than Orla Mining. The stock trades about -0.08 of its potential returns per unit of risk. The Orla Mining is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 408.00 in Orla Mining on August 30, 2024 and sell it today you would earn a total of 58.00 from holding Orla Mining or generate 14.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braskem SA Class vs. Orla Mining
Performance |
| Timeline |
| Braskem SA Class |
| Orla Mining |
Braskem SA and Orla Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and Orla Mining
The main advantage of trading using opposite Braskem SA and Orla Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, Orla Mining 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 Orla Mining will offset losses from the drop in Orla Mining's long position.| Braskem SA vs. Valhi Inc | Braskem SA vs. Huntsman | Braskem SA vs. Lsb Industries | Braskem SA vs. Westlake Chemical Partners |
| Orla Mining vs. K92 Mining | Orla Mining vs. Equinox Gold Corp | Orla Mining vs. Contango ORE | Orla Mining vs. Sandstorm Gold Ltd |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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