Correlation Between Braskem SA and Santech Holdings
Can any of the company-specific risk be diversified away by investing in both Braskem SA and Santech 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 Santech 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 Santech Holdings Limited, you can compare the effects of market volatilities on Braskem SA and Santech 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 Santech Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Santech Holdings.
Diversification Opportunities for Braskem SA and Santech Holdings
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Braskem and Santech is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and Santech Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santech 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 Santech Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santech Holdings has no effect on the direction of Braskem SA i.e., Braskem SA and Santech Holdings go up and down completely randomly.
Pair Corralation between Braskem SA and Santech Holdings
Considering the 90-day investment horizon Braskem SA Class is expected to under-perform the Santech Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Braskem SA Class is 12.08 times less risky than Santech Holdings. The stock trades about -0.32 of its potential returns per unit of risk. The Santech Holdings Limited is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 69.00 in Santech Holdings Limited on November 29, 2024 and sell it today you would earn a total of 105.00 from holding Santech Holdings Limited or generate 152.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braskem SA Class vs. Santech Holdings Limited
Performance |
| Timeline |
| Braskem SA Class |
| Santech Holdings |
Braskem SA and Santech Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and Santech Holdings
The main advantage of trading using opposite Braskem SA and Santech Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, Santech 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 Santech Holdings will offset losses from the drop in Santech Holdings' long position.| Braskem SA vs. Valhi Inc | Braskem SA vs. Huntsman | Braskem SA vs. Lsb Industries | Braskem SA vs. Westlake Chemical Partners |
| Santech Holdings vs. Treasury Wine Estates | Santech Holdings vs. McGrath RentCorp | Santech Holdings vs. Nascent Wine | Santech Holdings vs. U Haul Holding |
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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