Correlation Between Braskem SA and ZK International
Can any of the company-specific risk be diversified away by investing in both Braskem SA and ZK International 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 ZK International 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 ZK International Group, you can compare the effects of market volatilities on Braskem SA and ZK International 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 ZK International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and ZK International.
Diversification Opportunities for Braskem SA and ZK International
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Braskem and ZKIN is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and ZK International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZK International 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 ZK International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZK International has no effect on the direction of Braskem SA i.e., Braskem SA and ZK International go up and down completely randomly.
Pair Corralation between Braskem SA and ZK International
Considering the 90-day investment horizon Braskem SA Class is expected to under-perform the ZK International. But the stock apears to be less risky and, when comparing its historical volatility, Braskem SA Class is 2.43 times less risky than ZK International. The stock trades about -0.13 of its potential returns per unit of risk. The ZK International Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 47.00 in ZK International Group on September 2, 2024 and sell it today you would earn a total of 7.00 from holding ZK International Group or generate 14.89% 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. ZK International Group
Performance |
| Timeline |
| Braskem SA Class |
| ZK International |
Braskem SA and ZK International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and ZK International
The main advantage of trading using opposite Braskem SA and ZK International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, ZK International 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 ZK International will offset losses from the drop in ZK International's long position.| Braskem SA vs. Valhi Inc | Braskem SA vs. Huntsman | Braskem SA vs. Lsb Industries | Braskem SA vs. Westlake Chemical Partners |
| ZK International vs. Hongli Group Ordinary | ZK International vs. Reliance Steel Aluminum | ZK International vs. Companhia Siderurgica Nacional | ZK International vs. ArcelorMittal SA ADR |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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