Correlation Between Eastman Chemical and Ibstock PLC
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Ibstock PLC 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 Ibstock PLC 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 Ibstock PLC, you can compare the effects of market volatilities on Eastman Chemical and Ibstock PLC 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 Ibstock PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Ibstock PLC.
Diversification Opportunities for Eastman Chemical and Ibstock PLC
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eastman and Ibstock is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical Co and Ibstock PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ibstock 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 Ibstock PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ibstock PLC has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Ibstock PLC go up and down completely randomly.
Pair Corralation between Eastman Chemical and Ibstock PLC
Assuming the 90 days trading horizon Eastman Chemical Co is expected to generate 0.83 times more return on investment than Ibstock PLC. However, Eastman Chemical Co is 1.2 times less risky than Ibstock PLC. It trades about -0.15 of its potential returns per unit of risk. Ibstock PLC is currently generating about -0.2 per unit of risk. If you would invest 10,590 in Eastman Chemical Co on August 24, 2024 and sell it today you would lose (498.00) from holding Eastman Chemical Co or give up 4.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Eastman Chemical Co vs. Ibstock PLC
Performance |
| Timeline |
| Eastman Chemical |
| Ibstock PLC |
Eastman Chemical and Ibstock PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Ibstock PLC
The main advantage of trading using opposite Eastman Chemical and Ibstock PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Ibstock PLC 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 Ibstock PLC will offset losses from the drop in Ibstock PLC's long position.| Eastman Chemical vs. X FAB Silicon Foundries | Eastman Chemical vs. Ocean Harvest Technology | Eastman Chemical vs. Spotify Technology SA | Eastman Chemical vs. Panther Metals PLC |
| Ibstock PLC vs. Givaudan SA | Ibstock PLC vs. Antofagasta PLC | Ibstock PLC vs. Centamin PLC | Ibstock PLC vs. Atalaya Mining |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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