Correlation Between Eastman Chemical and Beowulf Mining
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Beowulf Mining 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 Beowulf Mining 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 Beowulf Mining, you can compare the effects of market volatilities on Eastman Chemical and Beowulf Mining 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 Beowulf Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Beowulf Mining.
Diversification Opportunities for Eastman Chemical and Beowulf Mining
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eastman and Beowulf is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical Co and Beowulf Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beowulf Mining 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 Beowulf Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beowulf Mining has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Beowulf Mining go up and down completely randomly.
Pair Corralation between Eastman Chemical and Beowulf Mining
Assuming the 90 days trading horizon Eastman Chemical Co is expected to generate 0.37 times more return on investment than Beowulf Mining. However, Eastman Chemical Co is 2.67 times less risky than Beowulf Mining. It trades about 0.04 of its potential returns per unit of risk. Beowulf Mining is currently generating about -0.08 per unit of risk. If you would invest 8,174 in Eastman Chemical Co on September 4, 2024 and sell it today you would earn a total of 2,210 from holding Eastman Chemical Co or generate 27.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.96% |
| Values | Daily Returns |
Eastman Chemical Co vs. Beowulf Mining
Performance |
| Timeline |
| Eastman Chemical |
| Beowulf Mining |
Eastman Chemical and Beowulf Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Beowulf Mining
The main advantage of trading using opposite Eastman Chemical and Beowulf Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Beowulf Mining 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 Beowulf Mining will offset losses from the drop in Beowulf Mining'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 |
| Beowulf Mining vs. Antofagasta PLC | Beowulf Mining vs. Atalaya Mining | Beowulf Mining vs. Ferrexpo PLC | Beowulf Mining vs. Amaroq Minerals |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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