Correlation Between GREENX METALS and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both GREENX METALS 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 GREENX METALS and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GREENX METALS LTD and Eastman Chemical, you can compare the effects of market volatilities on GREENX METALS 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 GREENX METALS with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and Eastman Chemical.
Diversification Opportunities for GREENX METALS and Eastman Chemical
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between GREENX and Eastman is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and Eastman Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and GREENX METALS 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 GREENX METALS LTD 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 GREENX METALS i.e., GREENX METALS and Eastman Chemical go up and down completely randomly.
Pair Corralation between GREENX METALS and Eastman Chemical
Assuming the 90 days trading horizon GREENX METALS LTD is expected to under-perform the Eastman Chemical. In addition to that, GREENX METALS is 1.91 times more volatile than Eastman Chemical. It trades about -0.07 of its total potential returns per unit of risk. Eastman Chemical is currently generating about 0.14 per unit of volatility. If you would invest 8,862 in Eastman Chemical on December 1, 2024 and sell it today you would earn a total of 468.00 from holding Eastman Chemical or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GREENX METALS LTD vs. Eastman Chemical
Performance |
| Timeline |
| GREENX METALS LTD |
| Eastman Chemical |
GREENX METALS and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GREENX METALS and Eastman Chemical
The main advantage of trading using opposite GREENX METALS and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREENX METALS 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.| GREENX METALS vs. Japan Asia Investment | GREENX METALS vs. PennyMac Mortgage Investment | GREENX METALS vs. JLF INVESTMENT | GREENX METALS vs. MidCap Financial Investment |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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