Correlation Between Bradespar and Braskem SA
Can any of the company-specific risk be diversified away by investing in both Bradespar and Braskem SA 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 Bradespar and Braskem SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bradespar SA and Braskem SA, you can compare the effects of market volatilities on Bradespar and Braskem SA 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 Bradespar with a short position of Braskem SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bradespar and Braskem SA.
Diversification Opportunities for Bradespar and Braskem SA
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bradespar and Braskem is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Bradespar SA and Braskem SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braskem SA and Bradespar 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 Bradespar SA are associated (or correlated) with Braskem SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Braskem SA has no effect on the direction of Bradespar i.e., Bradespar and Braskem SA go up and down completely randomly.
Pair Corralation between Bradespar and Braskem SA
Assuming the 90 days trading horizon Bradespar SA is expected to generate 0.54 times more return on investment than Braskem SA. However, Bradespar SA is 1.84 times less risky than Braskem SA. It trades about -0.14 of its potential returns per unit of risk. Braskem SA is currently generating about -0.43 per unit of risk. If you would invest 1,743 in Bradespar SA on August 30, 2024 and sell it today you would lose (66.00) from holding Bradespar SA or give up 3.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bradespar SA vs. Braskem SA
Performance |
| Timeline |
| Bradespar SA |
| Braskem SA |
Bradespar and Braskem SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bradespar and Braskem SA
The main advantage of trading using opposite Bradespar and Braskem SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bradespar position performs unexpectedly, Braskem SA 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 Braskem SA will offset losses from the drop in Braskem SA's long position.The idea behind Bradespar SA and Braskem SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Braskem SA vs. Companhia Siderrgica Nacional | Braskem SA vs. Banco Bradesco SA | Braskem SA vs. Vale SA | Braskem SA vs. Petrleo Brasileiro SA |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |