Correlation Between Braskem SA and Companhia
Can any of the company-specific risk be diversified away by investing in both Braskem SA and Companhia 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 Companhia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Braskem SA and Companhia de Gs, you can compare the effects of market volatilities on Braskem SA and Companhia 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 Companhia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Companhia.
Diversification Opportunities for Braskem SA and Companhia
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Braskem and Companhia is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA and Companhia de Gs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia de Gs 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 Companhia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia de Gs has no effect on the direction of Braskem SA i.e., Braskem SA and Companhia go up and down completely randomly.
Pair Corralation between Braskem SA and Companhia
Assuming the 90 days trading horizon Braskem SA is expected to under-perform the Companhia. In addition to that, Braskem SA is 1.21 times more volatile than Companhia de Gs. It trades about -0.43 of its total potential returns per unit of risk. Companhia de Gs is currently generating about 0.08 per unit of volatility. If you would invest 12,502 in Companhia de Gs on August 30, 2024 and sell it today you would earn a total of 348.00 from holding Companhia de Gs or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braskem SA vs. Companhia de Gs
Performance |
| Timeline |
| Braskem SA |
| Companhia de Gs |
Braskem SA and Companhia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and Companhia
The main advantage of trading using opposite Braskem SA and Companhia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, Companhia 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 Companhia will offset losses from the drop in Companhia's long position.| Braskem SA vs. Companhia Siderrgica Nacional | Braskem SA vs. Banco Bradesco SA | Braskem SA vs. Vale SA | Braskem SA vs. Petrleo Brasileiro SA |
| Companhia vs. Centrais Eltricas Brasileiras | Companhia vs. Companhia Energtica de | Companhia vs. Companhia de Saneamento | Companhia vs. Braskem 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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