Correlation Between Eastman Chemical and Roadside Real
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Roadside Real 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 Roadside Real 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 Roadside Real Estate, you can compare the effects of market volatilities on Eastman Chemical and Roadside Real 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 Roadside Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Roadside Real.
Diversification Opportunities for Eastman Chemical and Roadside Real
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eastman and Roadside is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical Co and Roadside Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roadside Real Estate 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 Roadside Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roadside Real Estate has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Roadside Real go up and down completely randomly.
Pair Corralation between Eastman Chemical and Roadside Real
Assuming the 90 days trading horizon Eastman Chemical Co is expected to under-perform the Roadside Real. But the stock apears to be less risky and, when comparing its historical volatility, Eastman Chemical Co is 1.43 times less risky than Roadside Real. The stock trades about -0.33 of its potential returns per unit of risk. The Roadside Real Estate is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,790 in Roadside Real Estate on September 21, 2024 and sell it today you would earn a total of 260.00 from holding Roadside Real Estate or generate 9.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Eastman Chemical Co vs. Roadside Real Estate
Performance |
| Timeline |
| Eastman Chemical |
| Roadside Real Estate |
Eastman Chemical and Roadside Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Roadside Real
The main advantage of trading using opposite Eastman Chemical and Roadside Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Roadside Real 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 Roadside Real will offset losses from the drop in Roadside Real's long position.| Eastman Chemical vs. Samsung Electronics Co | Eastman Chemical vs. Samsung Electronics Co | Eastman Chemical vs. Hyundai Motor | Eastman Chemical vs. Reliance Industries Ltd |
| Roadside Real vs. UNIQA Insurance Group | Roadside Real vs. Advanced Medical Solutions | Roadside Real vs. JB Hunt Transport | Roadside Real vs. Deltex Medical Group |
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 Directory module to find actively traded commodities issued by global exchanges.
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