Correlation Between Summa Silver and Braskem SA
Can any of the company-specific risk be diversified away by investing in both Summa Silver 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 Summa Silver and Braskem SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summa Silver Corp and Braskem SA Class, you can compare the effects of market volatilities on Summa Silver 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 Summa Silver with a short position of Braskem SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summa Silver and Braskem SA.
Diversification Opportunities for Summa Silver and Braskem SA
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Summa and Braskem is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Summa Silver 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 Summa Silver 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 Summa Silver 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 Summa Silver i.e., Summa Silver and Braskem SA go up and down completely randomly.
Pair Corralation between Summa Silver and Braskem SA
Assuming the 90 days horizon Summa Silver Corp is expected to under-perform the Braskem SA. In addition to that, Summa Silver is 1.46 times more volatile than Braskem SA Class. It trades about -0.35 of its total potential returns per unit of risk. Braskem SA Class is currently generating about -0.34 per unit of volatility. If you would invest 632.00 in Braskem SA Class on August 28, 2024 and sell it today you would lose (111.00) from holding Braskem SA Class or give up 17.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summa Silver Corp vs. Braskem SA Class
Performance |
| Timeline |
| Summa Silver Corp |
| Braskem SA Class |
Summa Silver and Braskem SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summa Silver and Braskem SA
The main advantage of trading using opposite Summa Silver and Braskem SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summa Silver 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.| Summa Silver vs. Morningstar Unconstrained Allocation | Summa Silver vs. High Yield Municipal Fund | Summa Silver vs. Knife River | Summa Silver vs. Klckner Co SE |
| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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