Correlation Between Eastman Chemical and Iron Mountain
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Iron Mountain 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 Eastman Chemical and Iron Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical Co and Iron Mountain, you can compare the effects of market volatilities on Eastman Chemical and Iron Mountain 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 Eastman Chemical with a short position of Iron Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Iron Mountain.
Diversification Opportunities for Eastman Chemical and Iron Mountain
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eastman and Iron is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical Co and Iron Mountain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron Mountain and Eastman Chemical 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 Eastman Chemical Co are associated (or correlated) with Iron Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron Mountain has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Iron Mountain go up and down completely randomly.
Pair Corralation between Eastman Chemical and Iron Mountain
Assuming the 90 days trading horizon Eastman Chemical Co is expected to generate 0.55 times more return on investment than Iron Mountain. However, Eastman Chemical Co is 1.83 times less risky than Iron Mountain. It trades about 0.11 of its potential returns per unit of risk. Iron Mountain is currently generating about -0.03 per unit of risk. If you would invest 9,062 in Eastman Chemical Co on October 31, 2024 and sell it today you would earn a total of 249.00 from holding Eastman Chemical Co or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Eastman Chemical Co vs. Iron Mountain
Performance |
| Timeline |
| Eastman Chemical |
| Iron Mountain |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Eastman Chemical and Iron Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Iron Mountain
The main advantage of trading using opposite Eastman Chemical and Iron Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Iron Mountain 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 Iron Mountain will offset losses from the drop in Iron Mountain's long position.| Eastman Chemical vs. Ion Beam Applications | Eastman Chemical vs. bet at home AG | Eastman Chemical vs. Vulcan Materials Co | Eastman Chemical vs. Datalogic |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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