Correlation Between Eastman Chemical and Bisichi Mining
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Bisichi 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 Bisichi 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 Bisichi Mining PLC, you can compare the effects of market volatilities on Eastman Chemical and Bisichi 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 Bisichi Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Bisichi Mining.
Diversification Opportunities for Eastman Chemical and Bisichi Mining
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eastman and Bisichi is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical Co and Bisichi Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bisichi Mining PLC 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 Bisichi Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bisichi Mining PLC has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Bisichi Mining go up and down completely randomly.
Pair Corralation between Eastman Chemical and Bisichi Mining
Assuming the 90 days trading horizon Eastman Chemical Co is expected to generate 0.54 times more return on investment than Bisichi Mining. However, Eastman Chemical Co is 1.84 times less risky than Bisichi Mining. It trades about 0.0 of its potential returns per unit of risk. Bisichi Mining PLC is currently generating about -0.06 per unit of risk. If you would invest 10,660 in Eastman Chemical Co on August 28, 2024 and sell it today you would lose (18.00) from holding Eastman Chemical Co or give up 0.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastman Chemical Co vs. Bisichi Mining PLC
Performance |
| Timeline |
| Eastman Chemical |
| Bisichi Mining PLC |
Eastman Chemical and Bisichi Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Bisichi Mining
The main advantage of trading using opposite Eastman Chemical and Bisichi Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Bisichi 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 Bisichi Mining will offset losses from the drop in Bisichi Mining's long position.| Eastman Chemical vs. UNIQA Insurance Group | Eastman Chemical vs. Westlake Chemical Corp | Eastman Chemical vs. Greenroc Mining PLC | Eastman Chemical vs. McEwen Mining |
| Bisichi Mining vs. Science in Sport | Bisichi Mining vs. Ecclesiastical Insurance Office | Bisichi Mining vs. National Beverage Corp | Bisichi Mining vs. Ebro Foods |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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