Correlation Between Eastman Chemical and EVS Broadcast
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and EVS Broadcast 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 EVS Broadcast 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 EVS Broadcast Equipment, you can compare the effects of market volatilities on Eastman Chemical and EVS Broadcast 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 EVS Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and EVS Broadcast.
Diversification Opportunities for Eastman Chemical and EVS Broadcast
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eastman and EVS is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical Co and EVS Broadcast Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVS Broadcast Equipment 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 EVS Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVS Broadcast Equipment has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and EVS Broadcast go up and down completely randomly.
Pair Corralation between Eastman Chemical and EVS Broadcast
Assuming the 90 days trading horizon Eastman Chemical Co is expected to under-perform the EVS Broadcast. In addition to that, Eastman Chemical is 1.13 times more volatile than EVS Broadcast Equipment. It trades about -0.02 of its total potential returns per unit of risk. EVS Broadcast Equipment is currently generating about 0.03 per unit of volatility. If you would invest 3,000 in EVS Broadcast Equipment on September 21, 2024 and sell it today you would earn a total of 110.00 from holding EVS Broadcast Equipment or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.22% |
| Values | Daily Returns |
Eastman Chemical Co vs. EVS Broadcast Equipment
Performance |
| Timeline |
| Eastman Chemical |
| EVS Broadcast Equipment |
Eastman Chemical and EVS Broadcast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and EVS Broadcast
The main advantage of trading using opposite Eastman Chemical and EVS Broadcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, EVS Broadcast 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 EVS Broadcast will offset losses from the drop in EVS Broadcast's long position.| Eastman Chemical vs. Samsung Electronics Co | Eastman Chemical vs. Samsung Electronics Co | Eastman Chemical vs. Hyundai Motor | Eastman Chemical vs. Reliance Industries Ltd |
| EVS Broadcast vs. Samsung Electronics Co | EVS Broadcast vs. Samsung Electronics Co | EVS Broadcast vs. Hyundai Motor | EVS Broadcast vs. Reliance Industries Ltd |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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