Correlation Between Companhia Paranaense and Braskem SA
Can any of the company-specific risk be diversified away by investing in both Companhia Paranaense and Braskem SA 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 Companhia Paranaense and Braskem SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia Paranaense de and Braskem SA, you can compare the effects of market volatilities on Companhia Paranaense and Braskem SA 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 Companhia Paranaense with a short position of Braskem SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Paranaense and Braskem SA.
Diversification Opportunities for Companhia Paranaense and Braskem SA
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Companhia and Braskem is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Paranaense de and Braskem SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braskem SA and Companhia Paranaense 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 Companhia Paranaense de are associated (or correlated) with Braskem SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Braskem SA has no effect on the direction of Companhia Paranaense i.e., Companhia Paranaense and Braskem SA go up and down completely randomly.
Pair Corralation between Companhia Paranaense and Braskem SA
Assuming the 90 days trading horizon Companhia Paranaense de is expected to generate 0.88 times more return on investment than Braskem SA. However, Companhia Paranaense de is 1.14 times less risky than Braskem SA. It trades about 0.0 of its potential returns per unit of risk. Braskem SA is currently generating about -0.39 per unit of risk. If you would invest 877.00 in Companhia Paranaense de on August 30, 2024 and sell it today you would lose (2.00) from holding Companhia Paranaense de or give up 0.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Companhia Paranaense de vs. Braskem SA
Performance |
| Timeline |
| Companhia Paranaense |
| Braskem SA |
Companhia Paranaense and Braskem SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Paranaense and Braskem SA
The main advantage of trading using opposite Companhia Paranaense and Braskem SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Paranaense position performs unexpectedly, Braskem SA 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 Braskem SA will offset losses from the drop in Braskem SA's long position.| Companhia Paranaense vs. Companhia Paranaense de | Companhia Paranaense vs. Companhia de Saneamento | Companhia Paranaense vs. CTEEP Companhia | Companhia Paranaense vs. CPFL Energia SA |
| Braskem SA vs. G2D Investments | Braskem SA vs. New Oriental Education | Braskem SA vs. Apartment Investment and | Braskem SA vs. The Trade Desk |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |