Correlation Between Braskem SA and Stepan
Can any of the company-specific risk be diversified away by investing in both Braskem SA and Stepan 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 Stepan 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 Stepan Company, you can compare the effects of market volatilities on Braskem SA and Stepan 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 Stepan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Stepan.
Diversification Opportunities for Braskem SA and Stepan
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Braskem and Stepan is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and Stepan Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepan Company 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 Stepan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepan Company has no effect on the direction of Braskem SA i.e., Braskem SA and Stepan go up and down completely randomly.
Pair Corralation between Braskem SA and Stepan
Considering the 90-day investment horizon Braskem SA Class is expected to under-perform the Stepan. In addition to that, Braskem SA is 1.06 times more volatile than Stepan Company. It trades about -0.29 of its total potential returns per unit of risk. Stepan Company is currently generating about 0.13 per unit of volatility. If you would invest 7,252 in Stepan Company on September 2, 2024 and sell it today you would earn a total of 438.00 from holding Stepan Company or generate 6.04% 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. Stepan Company
Performance |
| Timeline |
| Braskem SA Class |
| Stepan Company |
Braskem SA and Stepan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and Stepan
The main advantage of trading using opposite Braskem SA and Stepan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, Stepan 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 Stepan will offset losses from the drop in Stepan's long position.| Braskem SA vs. Valhi Inc | Braskem SA vs. Huntsman | Braskem SA vs. Lsb Industries | Braskem SA vs. Westlake Chemical Partners |
| Stepan vs. Linde plc Ordinary | Stepan vs. Air Products and | Stepan vs. Aquagold International | Stepan vs. Thrivent High Yield |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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