Correlation Between Braskem SA and Companhia Energtica
Can any of the company-specific risk be diversified away by investing in both Braskem SA and Companhia Energtica 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 Energtica 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 Energtica de, you can compare the effects of market volatilities on Braskem SA and Companhia Energtica 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 Energtica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Companhia Energtica.
Diversification Opportunities for Braskem SA and Companhia Energtica
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Braskem and Companhia is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA and Companhia Energtica de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Energtica 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 Energtica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Energtica has no effect on the direction of Braskem SA i.e., Braskem SA and Companhia Energtica go up and down completely randomly.
Pair Corralation between Braskem SA and Companhia Energtica
Assuming the 90 days trading horizon Braskem SA is expected to under-perform the Companhia Energtica. But the preferred stock apears to be less risky and, when comparing its historical volatility, Braskem SA is 1.22 times less risky than Companhia Energtica. The preferred stock trades about -0.01 of its potential returns per unit of risk. The Companhia Energtica de is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 718.00 in Companhia Energtica de on August 27, 2024 and sell it today you would earn a total of 452.00 from holding Companhia Energtica de or generate 62.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Braskem SA vs. Companhia Energtica de
Performance |
| Timeline |
| Braskem SA |
| Companhia Energtica |
Braskem SA and Companhia Energtica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and Companhia Energtica
The main advantage of trading using opposite Braskem SA and Companhia Energtica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, Companhia Energtica 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 Energtica will offset losses from the drop in Companhia Energtica'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 |
| Companhia Energtica vs. Usinas Siderrgicas de | Companhia Energtica vs. Companhia Siderrgica Nacional | Companhia Energtica vs. Gerdau SA | Companhia Energtica 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |