Correlation Between Travel + and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Travel + 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 Travel + and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Travel Leisure Co and Eastman Chemical Co, you can compare the effects of market volatilities on Travel + 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 Travel + with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travel + and Eastman Chemical.
Diversification Opportunities for Travel + and Eastman Chemical
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Travel and Eastman is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Travel Leisure Co and Eastman Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Travel + 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 Travel Leisure Co 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 Travel + i.e., Travel + and Eastman Chemical go up and down completely randomly.
Pair Corralation between Travel + and Eastman Chemical
If you would invest 5,815 in Travel Leisure Co on December 9, 2024 and sell it today you would earn a total of 0.00 from holding Travel Leisure Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Travel Leisure Co vs. Eastman Chemical Co
Performance |
| Timeline |
| Travel Leisure |
| Eastman Chemical |
Travel + and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travel + and Eastman Chemical
The main advantage of trading using opposite Travel + and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travel + 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.| Travel + vs. Toyota Motor Corp | Travel + vs. SoftBank Group Corp | Travel + vs. Samsung Electronics Co | Travel + vs. Samsung Electronics Co |
| Eastman Chemical vs. International Consolidated Airlines | Eastman Chemical vs. Eastinco Mining Exploration | Eastman Chemical vs. Anglo Asian Mining | Eastman Chemical vs. Southwest Airlines Co |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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