Correlation Between Jacquet Metal and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and Eastman Chemical 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 Jacquet Metal and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacquet Metal Service and Eastman Chemical Co, you can compare the effects of market volatilities on Jacquet Metal and Eastman Chemical 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 Jacquet Metal with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and Eastman Chemical.
Diversification Opportunities for Jacquet Metal and Eastman Chemical
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jacquet and Eastman is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and Eastman Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Jacquet Metal 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 Jacquet Metal Service are associated (or correlated) with Eastman Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastman Chemical has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and Eastman Chemical go up and down completely randomly.
Pair Corralation between Jacquet Metal and Eastman Chemical
Assuming the 90 days trading horizon Jacquet Metal Service is expected to under-perform the Eastman Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Jacquet Metal Service is 1.0 times less risky than Eastman Chemical. The stock trades about -0.02 of its potential returns per unit of risk. The Eastman Chemical Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 7,554 in Eastman Chemical Co on September 1, 2024 and sell it today you would earn a total of 2,918 from holding Eastman Chemical Co or generate 38.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 92.31% |
| Values | Daily Returns |
Jacquet Metal Service vs. Eastman Chemical Co
Performance |
| Timeline |
| Jacquet Metal Service |
| Eastman Chemical |
Jacquet Metal and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacquet Metal and Eastman Chemical
The main advantage of trading using opposite Jacquet Metal and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal position performs unexpectedly, Eastman Chemical 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 Eastman Chemical will offset losses from the drop in Eastman Chemical's long position.| Jacquet Metal vs. Uniper SE | Jacquet Metal vs. Mulberry Group PLC | Jacquet Metal vs. London Security Plc | Jacquet Metal vs. Triad Group PLC |
| Eastman Chemical vs. Ameriprise Financial | Eastman Chemical vs. Silvercorp Metals | Eastman Chemical vs. St Galler Kantonalbank | Eastman Chemical vs. Wyndham Hotels Resorts |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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