Correlation Between GameStop Corp and Braskem SA
Can any of the company-specific risk be diversified away by investing in both GameStop Corp 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 GameStop Corp and Braskem SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GameStop Corp and Braskem SA Class, you can compare the effects of market volatilities on GameStop Corp 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 GameStop Corp with a short position of Braskem SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GameStop Corp and Braskem SA.
Diversification Opportunities for GameStop Corp and Braskem SA
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GameStop and Braskem is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp 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 GameStop Corp 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 GameStop Corp 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 GameStop Corp i.e., GameStop Corp and Braskem SA go up and down completely randomly.
Pair Corralation between GameStop Corp and Braskem SA
Considering the 90-day investment horizon GameStop Corp is expected to generate 1.33 times more return on investment than Braskem SA. However, GameStop Corp is 1.33 times more volatile than Braskem SA Class. It trades about 0.39 of its potential returns per unit of risk. Braskem SA Class is currently generating about -0.3 per unit of risk. If you would invest 2,273 in GameStop Corp on August 27, 2024 and sell it today you would earn a total of 694.00 from holding GameStop Corp or generate 30.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GameStop Corp vs. Braskem SA Class
Performance |
| Timeline |
| GameStop Corp |
| Braskem SA Class |
GameStop Corp and Braskem SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GameStop Corp and Braskem SA
The main advantage of trading using opposite GameStop Corp and Braskem SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GameStop Corp 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.| GameStop Corp vs. RH | GameStop Corp vs. Dicks Sporting Goods | GameStop Corp vs. Best Buy Co | GameStop Corp vs. AutoZone |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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