Correlation Between Eastman Chemical and Supermarket Income
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Supermarket Income 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 Supermarket Income 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 Supermarket Income REIT, you can compare the effects of market volatilities on Eastman Chemical and Supermarket Income 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 Supermarket Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Supermarket Income.
Diversification Opportunities for Eastman Chemical and Supermarket Income
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eastman and Supermarket is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical Co and Supermarket Income REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supermarket Income REIT 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 Supermarket Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supermarket Income REIT has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Supermarket Income go up and down completely randomly.
Pair Corralation between Eastman Chemical and Supermarket Income
Assuming the 90 days trading horizon Eastman Chemical Co is expected to under-perform the Supermarket Income. In addition to that, Eastman Chemical is 1.49 times more volatile than Supermarket Income REIT. It trades about -0.11 of its total potential returns per unit of risk. Supermarket Income REIT is currently generating about 0.03 per unit of volatility. If you would invest 6,910 in Supermarket Income REIT on September 12, 2024 and sell it today you would earn a total of 30.00 from holding Supermarket Income REIT or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Eastman Chemical Co vs. Supermarket Income REIT
Performance |
| Timeline |
| Eastman Chemical |
| Supermarket Income REIT |
Eastman Chemical and Supermarket Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Supermarket Income
The main advantage of trading using opposite Eastman Chemical and Supermarket Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Supermarket Income 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 Supermarket Income will offset losses from the drop in Supermarket Income's long position.| Eastman Chemical vs. LPKF Laser Electronics | Eastman Chemical vs. Zegona Communications Plc | Eastman Chemical vs. Baker Steel Resources | Eastman Chemical vs. Orient Telecoms |
| Supermarket Income vs. Hammerson PLC | Supermarket Income vs. Neometals | Supermarket Income vs. Coor Service Management | Supermarket Income vs. Fidelity Sustainable USD |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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