Correlation Between Gaztransport and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Gaztransport 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 Gaztransport and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaztransport et Technigaz and Eastman Chemical Co, you can compare the effects of market volatilities on Gaztransport 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 Gaztransport with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and Eastman Chemical.
Diversification Opportunities for Gaztransport and Eastman Chemical
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gaztransport and Eastman is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and Eastman Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Gaztransport 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 Gaztransport et Technigaz 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 Gaztransport i.e., Gaztransport and Eastman Chemical go up and down completely randomly.
Pair Corralation between Gaztransport and Eastman Chemical
Assuming the 90 days trading horizon Gaztransport et Technigaz is expected to generate 0.67 times more return on investment than Eastman Chemical. However, Gaztransport et Technigaz is 1.48 times less risky than Eastman Chemical. It trades about 0.14 of its potential returns per unit of risk. Eastman Chemical Co is currently generating about 0.0 per unit of risk. If you would invest 13,330 in Gaztransport et Technigaz on September 1, 2024 and sell it today you would earn a total of 460.00 from holding Gaztransport et Technigaz or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Gaztransport et Technigaz vs. Eastman Chemical Co
Performance |
| Timeline |
| Gaztransport et Technigaz |
| Eastman Chemical |
Gaztransport and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport and Eastman Chemical
The main advantage of trading using opposite Gaztransport and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport 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.| Gaztransport vs. Uniper SE | Gaztransport vs. Mulberry Group PLC | Gaztransport vs. London Security Plc | Gaztransport 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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