Correlation Between Braskem SA and Newmont Goldcorp

Can any of the company-specific risk be diversified away by investing in both Braskem SA and Newmont Goldcorp 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 Newmont Goldcorp 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 Newmont Goldcorp Corp, you can compare the effects of market volatilities on Braskem SA and Newmont Goldcorp 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 Newmont Goldcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Newmont Goldcorp.

Diversification Opportunities for Braskem SA and Newmont Goldcorp

0.13

Correlation Coefficient

Braskem SA  Newmont Goldcorp

Average diversification

The 3 months correlation between Braskem and Newmont is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and Newmont Goldcorp Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont Goldcorp 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 Newmont Goldcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont Goldcorp Corp has no effect on the direction of Braskem SA i.e., Braskem SA and Newmont Goldcorp go up and down completely randomly.

Pair Corralation between Braskem SA and Newmont Goldcorp

Considering the 90-day investment horizon Braskem SA is expected to generate 3.32 times less return on investment than Newmont Goldcorp. In addition to that, Braskem SA is 2.0 times more volatile than Newmont Goldcorp Corp. It trades about 0.03 of its total potential returns per unit of risk. Newmont Goldcorp Corp is currently generating about 0.23 per unit of volatility. If you would invest  3,678  in Newmont Goldcorp Corp on December 28, 2024 and sell it today you would earn a total of  1,130  from holding Newmont Goldcorp Corp or generate 30.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Braskem SA Class  vs.  Newmont Goldcorp Corp

Braskem SA Class

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Braskem SA Class are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Braskem SA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Newmont Goldcorp Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Newmont Goldcorp Corp are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Newmont Goldcorp displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Braskem SA and Newmont Goldcorp

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

The idea behind Braskem SA Class and Newmont Goldcorp Corp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.