Correlation Between Eastman Chemical and Infrastrutture Wireless
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Infrastrutture Wireless 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 Infrastrutture Wireless 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 Infrastrutture Wireless Italiane, you can compare the effects of market volatilities on Eastman Chemical and Infrastrutture Wireless 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 Infrastrutture Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Infrastrutture Wireless.
Diversification Opportunities for Eastman Chemical and Infrastrutture Wireless
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eastman and Infrastrutture is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical Co and Infrastrutture Wireless Italia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infrastrutture Wireless 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 Infrastrutture Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infrastrutture Wireless has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Infrastrutture Wireless go up and down completely randomly.
Pair Corralation between Eastman Chemical and Infrastrutture Wireless
Assuming the 90 days trading horizon Eastman Chemical Co is expected to generate 0.92 times more return on investment than Infrastrutture Wireless. However, Eastman Chemical Co is 1.09 times less risky than Infrastrutture Wireless. It trades about 0.16 of its potential returns per unit of risk. Infrastrutture Wireless Italiane is currently generating about -0.15 per unit of risk. If you would invest 10,020 in Eastman Chemical Co on September 3, 2024 and sell it today you would earn a total of 452.00 from holding Eastman Chemical Co or generate 4.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Eastman Chemical Co vs. Infrastrutture Wireless Italia
Performance |
| Timeline |
| Eastman Chemical |
| Infrastrutture Wireless |
Eastman Chemical and Infrastrutture Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Infrastrutture Wireless
The main advantage of trading using opposite Eastman Chemical and Infrastrutture Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Infrastrutture Wireless 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 Infrastrutture Wireless will offset losses from the drop in Infrastrutture Wireless' long position.| Eastman Chemical vs. Live Nation Entertainment | Eastman Chemical vs. Wyndham Hotels Resorts | Eastman Chemical vs. Scandic Hotels Group | Eastman Chemical vs. Centaur Media |
| Infrastrutture Wireless vs. Catalyst Media Group | Infrastrutture Wireless vs. CATLIN GROUP | Infrastrutture Wireless vs. Magnora ASA | Infrastrutture Wireless vs. RTW Venture Fund |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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