Correlation Between Braskem SA and G2D Investments
Can any of the company-specific risk be diversified away by investing in both Braskem SA and G2D Investments 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 G2D Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Braskem SA and G2D Investments, you can compare the effects of market volatilities on Braskem SA and G2D Investments 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 G2D Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and G2D Investments.
Diversification Opportunities for Braskem SA and G2D Investments
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Braskem and G2D is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA and G2D Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G2D Investments 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 are associated (or correlated) with G2D Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G2D Investments has no effect on the direction of Braskem SA i.e., Braskem SA and G2D Investments go up and down completely randomly.
Pair Corralation between Braskem SA and G2D Investments
Assuming the 90 days trading horizon Braskem SA is expected to under-perform the G2D Investments. But the stock apears to be less risky and, when comparing its historical volatility, Braskem SA is 1.3 times less risky than G2D Investments. The stock trades about -0.46 of its potential returns per unit of risk. The G2D Investments is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 180.00 in G2D Investments on November 28, 2024 and sell it today you would lose (16.00) from holding G2D Investments or give up 8.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braskem SA vs. G2D Investments
Performance |
| Timeline |
| Braskem SA |
| G2D Investments |
Braskem SA and G2D Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and G2D Investments
The main advantage of trading using opposite Braskem SA and G2D Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, G2D Investments 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 G2D Investments will offset losses from the drop in G2D Investments' long position.| Braskem SA vs. Eastman Chemical | Braskem SA vs. Braskem SA | Braskem SA vs. Braskem SA | Braskem SA vs. Unipar Carbocloro SA |
| G2D Investments vs. Capital One Financial | G2D Investments vs. Mitsubishi UFJ Financial | G2D Investments vs. Lloyds Banking Group | G2D Investments vs. JB Hunt Transport |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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