Correlation Between Braskem SA and DaVita
Can any of the company-specific risk be diversified away by investing in both Braskem SA and DaVita 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 DaVita into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Braskem SA and DaVita Inc, you can compare the effects of market volatilities on Braskem SA and DaVita 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 DaVita. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and DaVita.
Diversification Opportunities for Braskem SA and DaVita
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Braskem and DaVita is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA and DaVita Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DaVita Inc 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 DaVita. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DaVita Inc has no effect on the direction of Braskem SA i.e., Braskem SA and DaVita go up and down completely randomly.
Pair Corralation between Braskem SA and DaVita
Assuming the 90 days trading horizon Braskem SA is expected to under-perform the DaVita. In addition to that, Braskem SA is 1.4 times more volatile than DaVita Inc. It trades about -0.41 of its total potential returns per unit of risk. DaVita Inc is currently generating about 0.57 per unit of volatility. If you would invest 81,536 in DaVita Inc on August 31, 2024 and sell it today you would earn a total of 17,542 from holding DaVita Inc or generate 21.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braskem SA vs. DaVita Inc
Performance |
| Timeline |
| Braskem SA |
| DaVita Inc |
Braskem SA and DaVita Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and DaVita
The main advantage of trading using opposite Braskem SA and DaVita positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, DaVita 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 DaVita will offset losses from the drop in DaVita's long position.| Braskem SA vs. Companhia Siderrgica Nacional | Braskem SA vs. Usinas Siderrgicas de | Braskem SA vs. Companhia Energtica de | Braskem SA vs. Cosan 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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