Correlation Between PETRONAS Chemicals and Braskem SA

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

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

Diversification Opportunities for PETRONAS Chemicals and Braskem SA

0.0

Correlation Coefficient

PETRONAS Chemicals  Braskem SA

Pay attention - limited upside

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

Pair Corralation between PETRONAS Chemicals and Braskem SA

If you would invest  93.00  in PETRONAS Chemicals Group on October 6, 2024 and sell it today you would earn a total of  0.00  from holding PETRONAS Chemicals Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

PETRONAS Chemicals Group  vs.  Braskem SA Class

PETRONAS Chemicals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PETRONAS Chemicals Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, PETRONAS Chemicals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Braskem SA Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Braskem SA Class has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with PETRONAS Chemicals and Braskem SA

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

The idea behind PETRONAS Chemicals Group and Braskem SA Class 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.