Correlation Between SOUTHERN and Braskem SA
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By analyzing existing cross correlation between SOUTHERN CALIF EDISON and Braskem SA Class, you can compare the effects of market volatilities on SOUTHERN 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 SOUTHERN with a short position of Braskem SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOUTHERN and Braskem SA.
Diversification Opportunities for SOUTHERN and Braskem SA
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SOUTHERN and Braskem is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SOUTHERN CALIF EDISON 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 SOUTHERN 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 SOUTHERN CALIF EDISON 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 SOUTHERN i.e., SOUTHERN and Braskem SA go up and down completely randomly.
Pair Corralation between SOUTHERN and Braskem SA
Assuming the 90 days trading horizon SOUTHERN CALIF EDISON is expected to generate 0.33 times more return on investment than Braskem SA. However, SOUTHERN CALIF EDISON is 3.05 times less risky than Braskem SA. It trades about 0.22 of its potential returns per unit of risk. Braskem SA Class is currently generating about -0.24 per unit of risk. If you would invest 10,327 in SOUTHERN CALIF EDISON on September 12, 2024 and sell it today you would earn a total of 217.00 from holding SOUTHERN CALIF EDISON or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 61.9% |
| Values | Daily Returns |
SOUTHERN CALIF EDISON vs. Braskem SA Class
Performance |
| Timeline |
| SOUTHERN CALIF EDISON |
| Braskem SA Class |
SOUTHERN and Braskem SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOUTHERN and Braskem SA
The main advantage of trading using opposite SOUTHERN and Braskem SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOUTHERN 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.| SOUTHERN vs. MACOM Technology Solutions | SOUTHERN vs. Nexstar Broadcasting Group | SOUTHERN vs. Ryanair Holdings PLC | SOUTHERN vs. ON Semiconductor |
| 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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