Correlation Between Usinas Siderrgicas and Braskem SA
Can any of the company-specific risk be diversified away by investing in both Usinas Siderrgicas 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 Usinas Siderrgicas and Braskem SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Usinas Siderrgicas de and Braskem SA, you can compare the effects of market volatilities on Usinas Siderrgicas 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 Usinas Siderrgicas with a short position of Braskem SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Usinas Siderrgicas and Braskem SA.
Diversification Opportunities for Usinas Siderrgicas and Braskem SA
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Usinas and Braskem is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Usinas Siderrgicas de and Braskem SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braskem SA and Usinas Siderrgicas 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 Usinas Siderrgicas de 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 has no effect on the direction of Usinas Siderrgicas i.e., Usinas Siderrgicas and Braskem SA go up and down completely randomly.
Pair Corralation between Usinas Siderrgicas and Braskem SA
Assuming the 90 days trading horizon Usinas Siderrgicas de is expected to under-perform the Braskem SA. But the stock apears to be less risky and, when comparing its historical volatility, Usinas Siderrgicas de is 1.41 times less risky than Braskem SA. The stock trades about -0.18 of its potential returns per unit of risk. The Braskem SA is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,532 in Braskem SA on October 26, 2024 and sell it today you would lose (94.00) from holding Braskem SA or give up 6.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Usinas Siderrgicas de vs. Braskem SA
Performance |
| Timeline |
| Usinas Siderrgicas |
| Braskem SA |
Usinas Siderrgicas and Braskem SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Usinas Siderrgicas and Braskem SA
The main advantage of trading using opposite Usinas Siderrgicas and Braskem SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Usinas Siderrgicas 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.| Usinas Siderrgicas vs. Usinas Siderrgicas de | Usinas Siderrgicas vs. Companhia Siderrgica Nacional | Usinas Siderrgicas vs. Gerdau SA | Usinas Siderrgicas vs. Gerdau SA |
| Braskem SA vs. Eastman Chemical | Braskem SA vs. Braskem SA | Braskem SA vs. Braskem SA | Braskem SA vs. Unipar Carbocloro SA |
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 Directory module to find actively traded commodities issued by global exchanges.
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