Correlation Between EVS Broadcast and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both EVS Broadcast 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 EVS Broadcast and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EVS Broadcast Equipment and Eastman Chemical Co, you can compare the effects of market volatilities on EVS Broadcast 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 EVS Broadcast with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVS Broadcast and Eastman Chemical.
Diversification Opportunities for EVS Broadcast and Eastman Chemical
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EVS and Eastman is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment and Eastman Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and EVS Broadcast 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 EVS Broadcast Equipment 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 EVS Broadcast i.e., EVS Broadcast and Eastman Chemical go up and down completely randomly.
Pair Corralation between EVS Broadcast and Eastman Chemical
Assuming the 90 days trading horizon EVS Broadcast Equipment is expected to generate 0.88 times more return on investment than Eastman Chemical. However, EVS Broadcast Equipment is 1.13 times less risky than Eastman Chemical. It trades about 0.03 of its potential returns per unit of risk. Eastman Chemical Co is currently generating about -0.02 per unit of risk. If you would invest 3,000 in EVS Broadcast Equipment on September 21, 2024 and sell it today you would earn a total of 110.00 from holding EVS Broadcast Equipment or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.22% |
| Values | Daily Returns |
EVS Broadcast Equipment vs. Eastman Chemical Co
Performance |
| Timeline |
| EVS Broadcast Equipment |
| Eastman Chemical |
EVS Broadcast and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EVS Broadcast and Eastman Chemical
The main advantage of trading using opposite EVS Broadcast and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVS Broadcast 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.| EVS Broadcast vs. Samsung Electronics Co | EVS Broadcast vs. Samsung Electronics Co | EVS Broadcast vs. Hyundai Motor | EVS Broadcast vs. Reliance Industries Ltd |
| Eastman Chemical vs. Samsung Electronics Co | Eastman Chemical vs. Samsung Electronics Co | Eastman Chemical vs. Hyundai Motor | Eastman Chemical vs. Reliance Industries Ltd |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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