Correlation Between Eastman Chemical and Chocoladefabriken
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Chocoladefabriken 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 Chocoladefabriken 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 Chocoladefabriken Lindt Spruengli, you can compare the effects of market volatilities on Eastman Chemical and Chocoladefabriken 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 Chocoladefabriken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Chocoladefabriken.
Diversification Opportunities for Eastman Chemical and Chocoladefabriken
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eastman and Chocoladefabriken is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical Co and Chocoladefabriken Lindt Spruen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chocoladefabriken Lindt 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 Chocoladefabriken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chocoladefabriken Lindt has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Chocoladefabriken go up and down completely randomly.
Pair Corralation between Eastman Chemical and Chocoladefabriken
Assuming the 90 days trading horizon Eastman Chemical Co is expected to generate 1.27 times more return on investment than Chocoladefabriken. However, Eastman Chemical is 1.27 times more volatile than Chocoladefabriken Lindt Spruengli. It trades about 0.05 of its potential returns per unit of risk. Chocoladefabriken Lindt Spruengli is currently generating about -0.02 per unit of risk. If you would invest 8,577 in Eastman Chemical Co on September 12, 2024 and sell it today you would earn a total of 1,365 from holding Eastman Chemical Co or generate 15.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.17% |
| Values | Daily Returns |
Eastman Chemical Co vs. Chocoladefabriken Lindt Spruen
Performance |
| Timeline |
| Eastman Chemical |
| Chocoladefabriken Lindt |
Eastman Chemical and Chocoladefabriken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Chocoladefabriken
The main advantage of trading using opposite Eastman Chemical and Chocoladefabriken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Chocoladefabriken 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 Chocoladefabriken will offset losses from the drop in Chocoladefabriken's long position.| Eastman Chemical vs. LPKF Laser Electronics | Eastman Chemical vs. Zegona Communications Plc | Eastman Chemical vs. Baker Steel Resources | Eastman Chemical vs. Orient Telecoms |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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