Correlation Between Darden Restaurants and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Darden Restaurants 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 Darden Restaurants and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Darden Restaurants and Eastman Chemical Co, you can compare the effects of market volatilities on Darden Restaurants 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 Darden Restaurants with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Darden Restaurants and Eastman Chemical.
Diversification Opportunities for Darden Restaurants and Eastman Chemical
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Darden and Eastman is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Darden Restaurants and Eastman Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Darden Restaurants 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 Darden Restaurants 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 Darden Restaurants i.e., Darden Restaurants and Eastman Chemical go up and down completely randomly.
Pair Corralation between Darden Restaurants and Eastman Chemical
Assuming the 90 days trading horizon Darden Restaurants is expected to generate 2.82 times more return on investment than Eastman Chemical. However, Darden Restaurants is 2.82 times more volatile than Eastman Chemical Co. It trades about 0.17 of its potential returns per unit of risk. Eastman Chemical Co is currently generating about -0.54 per unit of risk. If you would invest 16,429 in Darden Restaurants on October 14, 2024 and sell it today you would earn a total of 1,540 from holding Darden Restaurants or generate 9.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Darden Restaurants vs. Eastman Chemical Co
Performance |
| Timeline |
| Darden Restaurants |
| Eastman Chemical |
Darden Restaurants and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Darden Restaurants and Eastman Chemical
The main advantage of trading using opposite Darden Restaurants and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Darden Restaurants 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.| Darden Restaurants vs. Infrastrutture Wireless Italiane | Darden Restaurants vs. Verizon Communications | Darden Restaurants vs. Fonix Mobile plc | Darden Restaurants vs. Cars Inc |
| Eastman Chemical vs. Atalaya Mining | Eastman Chemical vs. New Residential Investment | Eastman Chemical vs. URU Metals | Eastman Chemical vs. Darden Restaurants |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |