Correlation Between Uniper SE and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Uniper SE 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 Uniper SE and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uniper SE and Eastman Chemical Co, you can compare the effects of market volatilities on Uniper SE 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 Uniper SE with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniper SE and Eastman Chemical.
Diversification Opportunities for Uniper SE and Eastman Chemical
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Uniper and Eastman is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Uniper SE and Eastman Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Uniper SE 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 Uniper SE 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 Uniper SE i.e., Uniper SE and Eastman Chemical go up and down completely randomly.
Pair Corralation between Uniper SE and Eastman Chemical
Assuming the 90 days trading horizon Uniper SE is expected to under-perform the Eastman Chemical. In addition to that, Uniper SE is 1.8 times more volatile than Eastman Chemical Co. It trades about -0.04 of its total potential returns per unit of risk. Eastman Chemical Co is currently generating about 0.05 per unit of volatility. If you would invest 9,681 in Eastman Chemical Co on September 3, 2024 and sell it today you would earn a total of 791.00 from holding Eastman Chemical Co or generate 8.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.09% |
| Values | Daily Returns |
Uniper SE vs. Eastman Chemical Co
Performance |
| Timeline |
| Uniper SE |
| Eastman Chemical |
Uniper SE and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uniper SE and Eastman Chemical
The main advantage of trading using opposite Uniper SE and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniper SE 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.| Uniper SE vs. Bytes Technology | Uniper SE vs. Livermore Investments Group | Uniper SE vs. FC Investment Trust | Uniper SE vs. Universal Display Corp |
| 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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