Correlation Between Bet At and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Bet At 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 Bet At and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between bet at home AG and Eastman Chemical Co, you can compare the effects of market volatilities on Bet At 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 Bet At with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bet At and Eastman Chemical.
Diversification Opportunities for Bet At and Eastman Chemical
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bet and Eastman is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding bet at home AG and Eastman Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Bet At 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 bet at home AG 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 Bet At i.e., Bet At and Eastman Chemical go up and down completely randomly.
Pair Corralation between Bet At and Eastman Chemical
Assuming the 90 days trading horizon Bet At is expected to generate 1.18 times less return on investment than Eastman Chemical. In addition to that, Bet At is 1.54 times more volatile than Eastman Chemical Co. It trades about 0.18 of its total potential returns per unit of risk. Eastman Chemical Co is currently generating about 0.33 per unit of volatility. If you would invest 8,936 in Eastman Chemical Co on November 8, 2024 and sell it today you would earn a total of 1,334 from holding Eastman Chemical Co or generate 14.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.96% |
| Values | Daily Returns |
bet at home AG vs. Eastman Chemical Co
Performance |
| Timeline |
| bet at home |
| Eastman Chemical |
Bet At and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bet At and Eastman Chemical
The main advantage of trading using opposite Bet At and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bet At 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.| Bet At vs. Target Healthcare REIT | Bet At vs. Accesso Technology Group | Bet At vs. Inspiration Healthcare Group | Bet At vs. Sabien Technology Group |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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