Correlation Between Braskem SA and Klabin SA
Can any of the company-specific risk be diversified away by investing in both Braskem SA and Klabin 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 Braskem SA and Klabin SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Braskem SA and Klabin SA, you can compare the effects of market volatilities on Braskem SA and Klabin 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 Braskem SA with a short position of Klabin SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Klabin SA.
Diversification Opportunities for Braskem SA and Klabin SA
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Braskem and Klabin is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA and Klabin SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klabin SA 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 Klabin SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klabin SA has no effect on the direction of Braskem SA i.e., Braskem SA and Klabin SA go up and down completely randomly.
Pair Corralation between Braskem SA and Klabin SA
Assuming the 90 days trading horizon Braskem SA is expected to under-perform the Klabin SA. In addition to that, Braskem SA is 1.09 times more volatile than Klabin SA. It trades about -0.39 of its total potential returns per unit of risk. Klabin SA is currently generating about 0.21 per unit of volatility. If you would invest 405.00 in Klabin SA on August 30, 2024 and sell it today you would earn a total of 35.00 from holding Klabin SA or generate 8.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braskem SA vs. Klabin SA
Performance |
| Timeline |
| Braskem SA |
| Klabin SA |
Braskem SA and Klabin SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and Klabin SA
The main advantage of trading using opposite Braskem SA and Klabin SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, Klabin 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 Klabin SA will offset losses from the drop in Klabin SA's long position.| Braskem SA vs. G2D Investments | Braskem SA vs. New Oriental Education | Braskem SA vs. Apartment Investment and | Braskem SA vs. The Trade Desk |
| Klabin SA vs. Klabin SA | Klabin SA vs. Transmissora Aliana de | Klabin SA vs. Klabin SA | Klabin SA vs. Itasa Investimentos |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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