Correlation Between SunOpta and Braskem SA
Can any of the company-specific risk be diversified away by investing in both SunOpta 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 SunOpta and Braskem SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and Braskem SA Class, you can compare the effects of market volatilities on SunOpta 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 SunOpta with a short position of Braskem SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and Braskem SA.
Diversification Opportunities for SunOpta and Braskem SA
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SunOpta and Braskem is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta 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 SunOpta 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 SunOpta 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 SunOpta i.e., SunOpta and Braskem SA go up and down completely randomly.
Pair Corralation between SunOpta and Braskem SA
Given the investment horizon of 90 days SunOpta is expected to generate 1.68 times more return on investment than Braskem SA. However, SunOpta is 1.68 times more volatile than Braskem SA Class. It trades about 0.36 of its potential returns per unit of risk. Braskem SA Class is currently generating about -0.49 per unit of risk. If you would invest 588.00 in SunOpta on August 23, 2024 and sell it today you would earn a total of 182.00 from holding SunOpta or generate 30.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunOpta vs. Braskem SA Class
Performance |
| Timeline |
| SunOpta |
| Braskem SA Class |
SunOpta and Braskem SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunOpta and Braskem SA
The main advantage of trading using opposite SunOpta and Braskem SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta 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.| SunOpta vs. Seneca Foods Corp | SunOpta vs. Natures Sunshine Products | SunOpta vs. J J Snack | SunOpta vs. John B Sanfilippo |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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