Correlation Between First Graphene and Braskem SA
Can any of the company-specific risk be diversified away by investing in both First Graphene 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 First Graphene and Braskem SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Graphene and Braskem SA Class, you can compare the effects of market volatilities on First Graphene 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 First Graphene with a short position of Braskem SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Graphene and Braskem SA.
Diversification Opportunities for First Graphene and Braskem SA
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Braskem is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding First Graphene and Braskem SA Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braskem SA Class and First Graphene 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 First Graphene 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 Class has no effect on the direction of First Graphene i.e., First Graphene and Braskem SA go up and down completely randomly.
Pair Corralation between First Graphene and Braskem SA
Assuming the 90 days horizon First Graphene is expected to generate 4.0 times more return on investment than Braskem SA. However, First Graphene is 4.0 times more volatile than Braskem SA Class. It trades about -0.04 of its potential returns per unit of risk. Braskem SA Class is currently generating about -0.35 per unit of risk. If you would invest 3.00 in First Graphene on August 28, 2024 and sell it today you would lose (0.80) from holding First Graphene or give up 26.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Graphene vs. Braskem SA Class
Performance |
| Timeline |
| First Graphene |
| Braskem SA Class |
First Graphene and Braskem SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Graphene and Braskem SA
The main advantage of trading using opposite First Graphene and Braskem SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Graphene 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.| First Graphene vs. Haydale Graphene Industries | First Graphene vs. Versarien plc | First Graphene vs. NanoXplore | First Graphene vs. G6 Materials Corp |
| Braskem SA vs. Huntsman | Braskem SA vs. AdvanSix | Braskem SA vs. Celanese | Braskem SA vs. Green Plains Renewable |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |