Correlation Between United States and Braskem SA
Can any of the company-specific risk be diversified away by investing in both United States 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 United States and Braskem SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and Braskem SA Class, you can compare the effects of market volatilities on United States 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 United States with a short position of Braskem SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Braskem SA.
Diversification Opportunities for United States and Braskem SA
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Braskem is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel 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 United States 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 United States Steel 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 United States i.e., United States and Braskem SA go up and down completely randomly.
Pair Corralation between United States and Braskem SA
Taking into account the 90-day investment horizon United States Steel is expected to generate 1.25 times more return on investment than Braskem SA. However, United States is 1.25 times more volatile than Braskem SA Class. It trades about 0.0 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 3,945 in United States Steel on August 25, 2024 and sell it today you would lose (42.00) from holding United States Steel or give up 1.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Steel vs. Braskem SA Class
Performance |
| Timeline |
| United States Steel |
| Braskem SA Class |
United States and Braskem SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Braskem SA
The main advantage of trading using opposite United States and Braskem SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States 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.| United States vs. Nucor Corp | United States vs. Steel Dynamics | United States vs. ArcelorMittal SA ADR | United States vs. Gerdau SA ADR |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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