Correlation Between Procter Gamble and Braskem SA
Can any of the company-specific risk be diversified away by investing in both Procter Gamble 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 Procter Gamble and Braskem SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Braskem SA Class, you can compare the effects of market volatilities on Procter Gamble 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 Procter Gamble with a short position of Braskem SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Braskem SA.
Diversification Opportunities for Procter Gamble and Braskem SA
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Procter and Braskem is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble 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 Procter Gamble 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 Procter Gamble 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 Procter Gamble i.e., Procter Gamble and Braskem SA go up and down completely randomly.
Pair Corralation between Procter Gamble and Braskem SA
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.44 times more return on investment than Braskem SA. However, Procter Gamble is 2.29 times less risky than Braskem SA. It trades about 0.32 of its potential returns per unit of risk. Braskem SA Class is currently generating about -0.32 per unit of risk. If you would invest 16,616 in Procter Gamble on August 31, 2024 and sell it today you would earn a total of 1,320 from holding Procter Gamble or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. Braskem SA Class
Performance |
| Timeline |
| Procter Gamble |
| Braskem SA Class |
Procter Gamble and Braskem SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Braskem SA
The main advantage of trading using opposite Procter Gamble and Braskem SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble 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.| Procter Gamble vs. Aquagold International | Procter Gamble vs. Morningstar Unconstrained Allocation | Procter Gamble vs. Thrivent High Yield | Procter Gamble vs. Via Renewables |
| Braskem SA vs. Huntsman | Braskem SA vs. AdvanSix | Braskem SA vs. Tronox Holdings PLC | Braskem SA vs. Celanese |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |