Correlation Between Braskem SA and ATT
Can any of the company-specific risk be diversified away by investing in both Braskem SA and ATT 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 ATT 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 ATT Inc, you can compare the effects of market volatilities on Braskem SA and ATT 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 ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and ATT.
Diversification Opportunities for Braskem SA and ATT
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Braskem and ATT is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc 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 ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Braskem SA i.e., Braskem SA and ATT go up and down completely randomly.
Pair Corralation between Braskem SA and ATT
Considering the 90-day investment horizon Braskem SA Class is expected to under-perform the ATT. In addition to that, Braskem SA is 3.03 times more volatile than ATT Inc. It trades about -0.34 of its total potential returns per unit of risk. ATT Inc is currently generating about -0.17 per unit of volatility. If you would invest 2,088 in ATT Inc on August 29, 2024 and sell it today you would lose (67.00) from holding ATT Inc or give up 3.21% 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. ATT Inc
Performance |
| Timeline |
| Braskem SA Class |
| ATT Inc |
Braskem SA and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and ATT
The main advantage of trading using opposite Braskem SA and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.| Braskem SA vs. Huntsman | Braskem SA vs. AdvanSix | Braskem SA vs. Celanese | Braskem SA vs. Green Plains Renewable |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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