Correlation Between NL Industries and Braskem SA
Can any of the company-specific risk be diversified away by investing in both NL Industries 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 NL Industries and Braskem SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NL Industries and Braskem SA Class, you can compare the effects of market volatilities on NL Industries 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 NL Industries with a short position of Braskem SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of NL Industries and Braskem SA.
Diversification Opportunities for NL Industries and Braskem SA
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NL Industries and Braskem is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding NL Industries 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 NL Industries 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 NL Industries 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 NL Industries i.e., NL Industries and Braskem SA go up and down completely randomly.
Pair Corralation between NL Industries and Braskem SA
Allowing for the 90-day total investment horizon NL Industries is expected to generate 1.52 times more return on investment than Braskem SA. However, NL Industries is 1.52 times more volatile than Braskem SA Class. It trades about 0.06 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 782.00 in NL Industries on August 27, 2024 and sell it today you would earn a total of 26.00 from holding NL Industries or generate 3.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NL Industries vs. Braskem SA Class
Performance |
| Timeline |
| NL Industries |
| Braskem SA Class |
NL Industries and Braskem SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NL Industries and Braskem SA
The main advantage of trading using opposite NL Industries and Braskem SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NL Industries 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.| NL Industries vs. Park Electrochemical | NL Industries vs. Innovative Solutions and | NL Industries vs. Curtiss Wright | NL Industries vs. National Presto Industries |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |