Correlation Between Cembra Money and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Cembra Money 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 Cembra Money and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cembra Money Bank and Eastman Chemical Co, you can compare the effects of market volatilities on Cembra Money 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 Cembra Money with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cembra Money and Eastman Chemical.
Diversification Opportunities for Cembra Money and Eastman Chemical
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cembra and Eastman is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Cembra Money Bank and Eastman Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Cembra Money 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 Cembra Money Bank 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 Cembra Money i.e., Cembra Money and Eastman Chemical go up and down completely randomly.
Pair Corralation between Cembra Money and Eastman Chemical
Assuming the 90 days trading horizon Cembra Money Bank is expected to generate 0.64 times more return on investment than Eastman Chemical. However, Cembra Money Bank is 1.56 times less risky than Eastman Chemical. It trades about 0.16 of its potential returns per unit of risk. Eastman Chemical Co is currently generating about -0.06 per unit of risk. If you would invest 7,675 in Cembra Money Bank on September 3, 2024 and sell it today you would earn a total of 435.00 from holding Cembra Money Bank or generate 5.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Cembra Money Bank vs. Eastman Chemical Co
Performance |
| Timeline |
| Cembra Money Bank |
| Eastman Chemical |
Cembra Money and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cembra Money and Eastman Chemical
The main advantage of trading using opposite Cembra Money and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cembra Money 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.| Cembra Money vs. Catalyst Media Group | Cembra Money vs. CATLIN GROUP | Cembra Money vs. Magnora ASA | Cembra Money vs. RTW Venture Fund |
| Eastman Chemical vs. Live Nation Entertainment | Eastman Chemical vs. Wyndham Hotels Resorts | Eastman Chemical vs. Scandic Hotels Group | Eastman Chemical vs. Centaur Media |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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