Correlation Between Eastman Chemical and SoftBank Group
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and SoftBank Group 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 SoftBank Group 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 SoftBank Group Corp, you can compare the effects of market volatilities on Eastman Chemical and SoftBank Group 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 SoftBank Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and SoftBank Group.
Diversification Opportunities for Eastman Chemical and SoftBank Group
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eastman and SoftBank is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical Co and SoftBank Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoftBank Group Corp 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 SoftBank Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SoftBank Group Corp has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and SoftBank Group go up and down completely randomly.
Pair Corralation between Eastman Chemical and SoftBank Group
Assuming the 90 days trading horizon Eastman Chemical is expected to generate 21.07 times less return on investment than SoftBank Group. But when comparing it to its historical volatility, Eastman Chemical Co is 2.01 times less risky than SoftBank Group. It trades about 0.03 of its potential returns per unit of risk. SoftBank Group Corp is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 918,500 in SoftBank Group Corp on October 25, 2024 and sell it today you would earn a total of 94,000 from holding SoftBank Group Corp or generate 10.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 68.75% |
| Values | Daily Returns |
Eastman Chemical Co vs. SoftBank Group Corp
Performance |
| Timeline |
| Eastman Chemical |
| SoftBank Group Corp |
Eastman Chemical and SoftBank Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and SoftBank Group
The main advantage of trading using opposite Eastman Chemical and SoftBank Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, SoftBank Group 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 SoftBank Group will offset losses from the drop in SoftBank Group's long position.| Eastman Chemical vs. Central Asia Metals | Eastman Chemical vs. Taiwan Semiconductor Manufacturing | Eastman Chemical vs. Odfjell Drilling | Eastman Chemical vs. AMG Advanced Metallurgical |
| SoftBank Group vs. PPHE Hotel Group | SoftBank Group vs. Spotify Technology SA | SoftBank Group vs. British American Tobacco | SoftBank Group vs. DXC Technology Co |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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