Correlation Between Braskem SA and US Gold
Can any of the company-specific risk be diversified away by investing in both Braskem SA and US Gold 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 US Gold 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 US Gold Corp, you can compare the effects of market volatilities on Braskem SA and US Gold 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 US Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and US Gold.
Diversification Opportunities for Braskem SA and US Gold
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Braskem and USAU is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and US Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Gold Corp 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 US Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Gold Corp has no effect on the direction of Braskem SA i.e., Braskem SA and US Gold go up and down completely randomly.
Pair Corralation between Braskem SA and US Gold
Considering the 90-day investment horizon Braskem SA Class is expected to generate 0.94 times more return on investment than US Gold. However, Braskem SA Class is 1.06 times less risky than US Gold. It trades about 0.29 of its potential returns per unit of risk. US Gold Corp is currently generating about 0.03 per unit of risk. If you would invest 623.00 in Braskem SA Class on June 30, 2024 and sell it today you would earn a total of 130.00 from holding Braskem SA Class or generate 20.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Braskem SA Class vs. US Gold Corp
Performance |
Timeline |
Braskem SA Class |
US Gold Corp |
Braskem SA and US Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Braskem SA and US Gold
The main advantage of trading using opposite Braskem SA and US Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, US Gold 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 US Gold will offset losses from the drop in US Gold's long position.Braskem SA vs. Valhi Inc | Braskem SA vs. Huntsman | Braskem SA vs. Lsb Industries | Braskem SA vs. Westlake Chemical Partners |
US Gold vs. Paramount Gold Nevada | US Gold vs. Liberty Gold Corp | US Gold vs. International Tower Hill | US Gold vs. Allegiant Gold |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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