Correlation Between Dexxos Participaes and Braskem SA
Can any of the company-specific risk be diversified away by investing in both Dexxos Participaes 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 Dexxos Participaes and Braskem SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dexxos Participaes SA and Braskem SA, you can compare the effects of market volatilities on Dexxos Participaes 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 Dexxos Participaes with a short position of Braskem SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dexxos Participaes and Braskem SA.
Diversification Opportunities for Dexxos Participaes and Braskem SA
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dexxos and Braskem is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Dexxos Participaes SA and Braskem SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braskem SA and Dexxos Participaes 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 Dexxos Participaes SA 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 Dexxos Participaes i.e., Dexxos Participaes and Braskem SA go up and down completely randomly.
Pair Corralation between Dexxos Participaes and Braskem SA
Assuming the 90 days trading horizon Dexxos Participaes SA is expected to generate 0.84 times more return on investment than Braskem SA. However, Dexxos Participaes SA is 1.18 times less risky than Braskem SA. It trades about -0.1 of its potential returns per unit of risk. Braskem SA is currently generating about -0.09 per unit of risk. If you would invest 1,051 in Dexxos Participaes SA on August 30, 2024 and sell it today you would lose (230.00) from holding Dexxos Participaes SA or give up 21.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dexxos Participaes SA vs. Braskem SA
Performance |
| Timeline |
| Dexxos Participaes |
| Braskem SA |
Dexxos Participaes and Braskem SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dexxos Participaes and Braskem SA
The main advantage of trading using opposite Dexxos Participaes and Braskem SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dexxos Participaes 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.| Dexxos Participaes vs. Braskem SA | Dexxos Participaes vs. Braskem SA | Dexxos Participaes vs. Unipar Carbocloro SA | Dexxos Participaes vs. Unipar Carbocloro SA |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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