Correlation Between Purecycle Technologies and Braskem SA
Can any of the company-specific risk be diversified away by investing in both Purecycle Technologies 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 Purecycle Technologies and Braskem SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Purecycle Technologies Holdings and Braskem SA Class, you can compare the effects of market volatilities on Purecycle Technologies 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 Purecycle Technologies with a short position of Braskem SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Purecycle Technologies and Braskem SA.
Diversification Opportunities for Purecycle Technologies and Braskem SA
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Purecycle and Braskem is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Purecycle Technologies Holding 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 Purecycle Technologies 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 Purecycle Technologies Holdings 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 Purecycle Technologies i.e., Purecycle Technologies and Braskem SA go up and down completely randomly.
Pair Corralation between Purecycle Technologies and Braskem SA
Assuming the 90 days horizon Purecycle Technologies Holdings is expected to generate 1.74 times more return on investment than Braskem SA. However, Purecycle Technologies is 1.74 times more volatile than Braskem SA Class. It trades about 0.03 of its potential returns per unit of risk. Braskem SA Class is currently generating about -0.01 per unit of risk. If you would invest 948.00 in Purecycle Technologies Holdings on November 9, 2024 and sell it today you would earn a total of 202.00 from holding Purecycle Technologies Holdings or generate 21.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Purecycle Technologies Holding vs. Braskem SA Class
Performance |
| Timeline |
| Purecycle Technologies |
| Braskem SA Class |
Purecycle Technologies and Braskem SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Purecycle Technologies and Braskem SA
The main advantage of trading using opposite Purecycle Technologies and Braskem SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Purecycle Technologies 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.The idea behind Purecycle Technologies Holdings and Braskem SA Class pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Braskem SA vs. Valhi Inc | Braskem SA vs. Huntsman | Braskem SA vs. Lsb Industries | Braskem SA vs. Westlake Chemical Partners |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |