Correlation Between Braskem SA and Energisa Mato
Can any of the company-specific risk be diversified away by investing in both Braskem SA and Energisa Mato 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 Energisa Mato into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Braskem SA and Energisa Mato Grosso, you can compare the effects of market volatilities on Braskem SA and Energisa Mato 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 Energisa Mato. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Energisa Mato.
Diversification Opportunities for Braskem SA and Energisa Mato
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Braskem and Energisa is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA and Energisa Mato Grosso in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energisa Mato Grosso 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 Energisa Mato. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energisa Mato Grosso has no effect on the direction of Braskem SA i.e., Braskem SA and Energisa Mato go up and down completely randomly.
Pair Corralation between Braskem SA and Energisa Mato
Assuming the 90 days trading horizon Braskem SA is expected to under-perform the Energisa Mato. In addition to that, Braskem SA is 287.71 times more volatile than Energisa Mato Grosso. It trades about -0.38 of its total potential returns per unit of risk. Energisa Mato Grosso is currently generating about -0.29 per unit of volatility. If you would invest 8,494 in Energisa Mato Grosso on August 30, 2024 and sell it today you would lose (4.00) from holding Energisa Mato Grosso or give up 0.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Braskem SA vs. Energisa Mato Grosso
Performance |
| Timeline |
| Braskem SA |
| Energisa Mato Grosso |
Braskem SA and Energisa Mato Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and Energisa Mato
The main advantage of trading using opposite Braskem SA and Energisa Mato positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, Energisa Mato 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 Energisa Mato will offset losses from the drop in Energisa Mato's long position.| Braskem SA vs. Usinas Siderrgicas de | Braskem SA vs. Companhia Siderrgica Nacional | Braskem SA vs. Banco Bradesco SA | Braskem SA vs. Vale SA |
| Energisa Mato vs. Credit Acceptance | Energisa Mato vs. Micron Technology | Energisa Mato vs. Global X Funds | Energisa Mato vs. Verizon Communications |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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