Correlation Between Braskem SA and Usinas Siderrgicas
Can any of the company-specific risk be diversified away by investing in both Braskem SA and Usinas Siderrgicas 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 Usinas Siderrgicas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Braskem SA and Usinas Siderrgicas de, you can compare the effects of market volatilities on Braskem SA and Usinas Siderrgicas 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 Usinas Siderrgicas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Usinas Siderrgicas.
Diversification Opportunities for Braskem SA and Usinas Siderrgicas
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Braskem and Usinas is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA and Usinas Siderrgicas de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usinas Siderrgicas 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 Usinas Siderrgicas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Usinas Siderrgicas has no effect on the direction of Braskem SA i.e., Braskem SA and Usinas Siderrgicas go up and down completely randomly.
Pair Corralation between Braskem SA and Usinas Siderrgicas
Assuming the 90 days trading horizon Braskem SA is expected to generate 1.41 times more return on investment than Usinas Siderrgicas. However, Braskem SA is 1.41 times more volatile than Usinas Siderrgicas de. It trades about -0.03 of its potential returns per unit of risk. Usinas Siderrgicas de is currently generating about -0.18 per unit of risk. If you would invest 1,532 in Braskem SA on October 26, 2024 and sell it today you would lose (94.00) from holding Braskem SA or give up 6.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braskem SA vs. Usinas Siderrgicas de
Performance |
| Timeline |
| Braskem SA |
| Usinas Siderrgicas |
Braskem SA and Usinas Siderrgicas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and Usinas Siderrgicas
The main advantage of trading using opposite Braskem SA and Usinas Siderrgicas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, Usinas Siderrgicas 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 Usinas Siderrgicas will offset losses from the drop in Usinas Siderrgicas' long position.| Braskem SA vs. Eastman Chemical | Braskem SA vs. Braskem SA | Braskem SA vs. Braskem SA | Braskem SA vs. Unipar Carbocloro SA |
| Usinas Siderrgicas vs. Usinas Siderrgicas de | Usinas Siderrgicas vs. Companhia Siderrgica Nacional | Usinas Siderrgicas vs. Gerdau SA | Usinas Siderrgicas vs. Gerdau 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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