Correlation Between Braskem SA and Universal Stainless

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

Diversification Opportunities for Braskem SA and Universal Stainless

0.0

Correlation Coefficient

Braskem SA  Universal Stainless

Pay attention - limited upside

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

Pair Corralation between Braskem SA and Universal Stainless

If you would invest  380.00  in Braskem SA Class on December 30, 2024 and sell it today you would earn a total of  15.00  from holding Braskem SA Class or generate 3.95% 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.  Universal Stainless Alloy

Braskem SA Class

Risk-Adjusted Performance

Weak

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.

Universal Stainless Alloy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Universal Stainless Alloy has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Universal Stainless 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 Universal Stainless

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

The idea behind Braskem SA Class and Universal Stainless Alloy 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.