Correlation Between Braskem SA and Bradespar
Can any of the company-specific risk be diversified away by investing in both Braskem SA and Bradespar 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 Bradespar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Braskem SA and Bradespar SA, you can compare the effects of market volatilities on Braskem SA and Bradespar 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 Bradespar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Bradespar.
Diversification Opportunities for Braskem SA and Bradespar
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Braskem and Bradespar is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA and Bradespar SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bradespar 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 Bradespar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bradespar SA has no effect on the direction of Braskem SA i.e., Braskem SA and Bradespar go up and down completely randomly.
Pair Corralation between Braskem SA and Bradespar
Assuming the 90 days trading horizon Braskem SA is expected to under-perform the Bradespar. In addition to that, Braskem SA is 1.86 times more volatile than Bradespar SA. It trades about -0.35 of its total potential returns per unit of risk. Bradespar SA is currently generating about -0.17 per unit of volatility. If you would invest 1,741 in Bradespar SA on August 27, 2024 and sell it today you would lose (74.00) from holding Bradespar SA or give up 4.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braskem SA vs. Bradespar SA
Performance |
| Timeline |
| Braskem SA |
| Bradespar SA |
Braskem SA and Bradespar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and Bradespar
The main advantage of trading using opposite Braskem SA and Bradespar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, Bradespar 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 Bradespar will offset losses from the drop in Bradespar's long position.| Braskem SA vs. Metalurgica Gerdau SA | Braskem SA vs. Companhia Siderrgica Nacional | Braskem SA vs. Companhia Energtica de | Braskem SA vs. Companhia Paranaense de |
| Bradespar vs. Bradespar SA | Bradespar vs. Metalurgica Gerdau SA | Bradespar vs. Banco Bradesco SA | Bradespar vs. Companhia Paranaense de |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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