Correlation Between Braskem SA and BCE
Can any of the company-specific risk be diversified away by investing in both Braskem SA and BCE 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 BCE 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 BCE Inc, you can compare the effects of market volatilities on Braskem SA and BCE 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 BCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and BCE.
Diversification Opportunities for Braskem SA and BCE
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Braskem and BCE is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and BCE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCE Inc 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 BCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCE Inc has no effect on the direction of Braskem SA i.e., Braskem SA and BCE go up and down completely randomly.
Pair Corralation between Braskem SA and BCE
Considering the 90-day investment horizon Braskem SA Class is expected to generate 17.49 times more return on investment than BCE. However, Braskem SA is 17.49 times more volatile than BCE Inc. It trades about 0.01 of its potential returns per unit of risk. BCE Inc is currently generating about 0.13 per unit of risk. If you would invest 363.00 in Braskem SA Class on March 23, 2025 and sell it today you would lose (11.00) from holding Braskem SA Class or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Braskem SA Class vs. BCE Inc
Performance |
| Timeline |
| Braskem SA Class |
| BCE Inc |
Braskem SA and BCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and BCE
The main advantage of trading using opposite Braskem SA and BCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, BCE 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 BCE will offset losses from the drop in BCE's long position.| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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