Correlation Between Braskem SA and Contango ORE

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

Diversification Opportunities for Braskem SA and Contango ORE

-0.61

Correlation Coefficient

Braskem SA  Contango ORE

Excellent diversification

The 3 months correlation between Braskem and Contango is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and Contango ORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contango ORE 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 Contango ORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contango ORE has no effect on the direction of Braskem SA i.e., Braskem SA and Contango ORE go up and down completely randomly.

Pair Corralation between Braskem SA and Contango ORE

Considering the 90-day investment horizon Braskem SA Class is expected to under-perform the Contango ORE. In addition to that, Braskem SA is 1.2 times more volatile than Contango ORE. It trades about -0.06 of its total potential returns per unit of risk. Contango ORE is currently generating about 0.14 per unit of volatility. If you would invest  1,977  in Contango ORE on July 18, 2025 and sell it today you would earn a total of  560.00  from holding Contango ORE or generate 28.33% return on investment over 90 days.

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

Braskem SA Class  vs.  Contango ORE

Braskem SA Class

Risk-Adjusted Performance

Weakest

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

Contango ORE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Contango ORE are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, Contango ORE displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Braskem SA and Contango ORE

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

The idea behind Braskem SA Class and Contango ORE 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.

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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.