Correlation Between Datalogic and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Datalogic and Eastman Chemical 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 Datalogic and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Datalogic and Eastman Chemical Co, you can compare the effects of market volatilities on Datalogic and Eastman Chemical 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 Datalogic with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datalogic and Eastman Chemical.
Diversification Opportunities for Datalogic and Eastman Chemical
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Datalogic and Eastman is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Datalogic and Eastman Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Datalogic 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 Datalogic are associated (or correlated) with Eastman Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastman Chemical has no effect on the direction of Datalogic i.e., Datalogic and Eastman Chemical go up and down completely randomly.
Pair Corralation between Datalogic and Eastman Chemical
Assuming the 90 days trading horizon Datalogic is expected to under-perform the Eastman Chemical. In addition to that, Datalogic is 1.64 times more volatile than Eastman Chemical Co. It trades about -0.03 of its total potential returns per unit of risk. Eastman Chemical Co is currently generating about 0.03 per unit of volatility. If you would invest 8,076 in Eastman Chemical Co on November 1, 2024 and sell it today you would earn a total of 1,235 from holding Eastman Chemical Co or generate 15.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.55% |
| Values | Daily Returns |
Datalogic vs. Eastman Chemical Co
Performance |
| Timeline |
| Datalogic |
| Eastman Chemical |
Datalogic and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datalogic and Eastman Chemical
The main advantage of trading using opposite Datalogic and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datalogic position performs unexpectedly, Eastman Chemical 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 Eastman Chemical will offset losses from the drop in Eastman Chemical's long position.| Datalogic vs. Eneraqua Technologies PLC | Datalogic vs. Xeros Technology Group | Datalogic vs. Auto Trader Group | Datalogic vs. Vulcan Materials Co |
| Eastman Chemical vs. Ion Beam Applications | Eastman Chemical vs. Rosslyn Data Technologies | Eastman Chemical vs. Dairy Farm International | Eastman Chemical vs. Vitec Software Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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