Correlation Between Braskem SA and Harman International

Can any of the company-specific risk be diversified away by investing in both Braskem SA and Harman International 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 Braskem SA and Harman International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Braskem SA Class and Harman International Industries, you can compare the effects of market volatilities on Braskem SA and Harman International 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 Braskem SA with a short position of Harman International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Harman International.

Diversification Opportunities for Braskem SA and Harman International

0.0

Correlation Coefficient

Braskem SA  Harman International

Pay attention - limited upside

The 3 months correlation between Braskem and Harman is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and Harman International Industrie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harman International and Braskem SA 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 Braskem SA Class are associated (or correlated) with Harman International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harman International has no effect on the direction of Braskem SA i.e., Braskem SA and Harman International go up and down completely randomly.

Pair Corralation between Braskem SA and Harman International

If you would invest (100.00) in Harman International Industries on January 30, 2024 and sell it today you would earn a total of  100.00  from holding Harman International Industries or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Braskem SA Class  vs.  Harman International Industrie

Braskem SA Class

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Braskem SA Class are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Braskem SA disclosed solid returns over the last few months and may actually be approaching a breakup point.

Harman International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harman International Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Harman International is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Braskem SA and Harman International

The main advantage of trading using opposite Braskem SA and Harman International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, Harman International 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 Harman International will offset losses from the drop in Harman International's long position.

The idea behind Braskem SA Class and Harman International Industries pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.