Correlation Between Eastman Chemical and Gaztransport
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Gaztransport 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 Gaztransport 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 Gaztransport et Technigaz, you can compare the effects of market volatilities on Eastman Chemical and Gaztransport 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 Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Gaztransport.
Diversification Opportunities for Eastman Chemical and Gaztransport
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eastman and Gaztransport is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical Co and Gaztransport et Technigaz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport et Technigaz 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 Gaztransport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport et Technigaz has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Gaztransport go up and down completely randomly.
Pair Corralation between Eastman Chemical and Gaztransport
Assuming the 90 days trading horizon Eastman Chemical Co is expected to under-perform the Gaztransport. In addition to that, Eastman Chemical is 1.4 times more volatile than Gaztransport et Technigaz. It trades about -0.04 of its total potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.11 per unit of volatility. If you would invest 13,656 in Gaztransport et Technigaz on August 28, 2024 and sell it today you would earn a total of 374.00 from holding Gaztransport et Technigaz or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastman Chemical Co vs. Gaztransport et Technigaz
Performance |
| Timeline |
| Eastman Chemical |
| Gaztransport et Technigaz |
Eastman Chemical and Gaztransport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Gaztransport
The main advantage of trading using opposite Eastman Chemical and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Gaztransport 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 Gaztransport will offset losses from the drop in Gaztransport's long position.| Eastman Chemical vs. Samsung Electronics Co | Eastman Chemical vs. Samsung Electronics Co | Eastman Chemical vs. Hyundai Motor | Eastman Chemical vs. Toyota Motor Corp |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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