Correlation Between Eastman Chemical and Adriatic Metals
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Adriatic Metals 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 Adriatic Metals 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 Adriatic Metals, you can compare the effects of market volatilities on Eastman Chemical and Adriatic Metals 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 Adriatic Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Adriatic Metals.
Diversification Opportunities for Eastman Chemical and Adriatic Metals
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eastman and Adriatic is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical Co and Adriatic Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adriatic Metals 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 Adriatic Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adriatic Metals has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Adriatic Metals go up and down completely randomly.
Pair Corralation between Eastman Chemical and Adriatic Metals
Assuming the 90 days trading horizon Eastman Chemical is expected to generate 1.12 times less return on investment than Adriatic Metals. But when comparing it to its historical volatility, Eastman Chemical Co is 1.46 times less risky than Adriatic Metals. It trades about 0.04 of its potential returns per unit of risk. Adriatic Metals is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 17,000 in Adriatic Metals on September 3, 2024 and sell it today you would earn a total of 4,150 from holding Adriatic Metals or generate 24.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 88.96% |
| Values | Daily Returns |
Eastman Chemical Co vs. Adriatic Metals
Performance |
| Timeline |
| Eastman Chemical |
| Adriatic Metals |
Eastman Chemical and Adriatic Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Adriatic Metals
The main advantage of trading using opposite Eastman Chemical and Adriatic Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Adriatic Metals 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 Adriatic Metals will offset losses from the drop in Adriatic Metals' 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 |
| Adriatic Metals vs. United Utilities Group | Adriatic Metals vs. Medical Properties Trust | Adriatic Metals vs. Federal Realty Investment | Adriatic Metals vs. Schroders Investment Trusts |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |