Correlation Between BlackRock Frontiers and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both BlackRock Frontiers 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 BlackRock Frontiers and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock Frontiers Investment and Eastman Chemical Co, you can compare the effects of market volatilities on BlackRock Frontiers 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 BlackRock Frontiers with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Frontiers and Eastman Chemical.
Diversification Opportunities for BlackRock Frontiers and Eastman Chemical
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BlackRock and Eastman is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Frontiers Investment and Eastman Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and BlackRock Frontiers 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 BlackRock Frontiers Investment 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 BlackRock Frontiers i.e., BlackRock Frontiers and Eastman Chemical go up and down completely randomly.
Pair Corralation between BlackRock Frontiers and Eastman Chemical
Assuming the 90 days trading horizon BlackRock Frontiers is expected to generate 14.0 times less return on investment than Eastman Chemical. But when comparing it to its historical volatility, BlackRock Frontiers Investment is 1.87 times less risky than Eastman Chemical. It trades about 0.03 of its potential returns per unit of risk. Eastman Chemical Co is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 8,860 in Eastman Chemical Co on November 3, 2024 and sell it today you would earn a total of 1,050 from holding Eastman Chemical Co or generate 11.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 91.3% |
| Values | Daily Returns |
BlackRock Frontiers Investment vs. Eastman Chemical Co
Performance |
| Timeline |
| BlackRock Frontiers |
| Eastman Chemical |
BlackRock Frontiers and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock Frontiers and Eastman Chemical
The main advantage of trading using opposite BlackRock Frontiers and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Frontiers 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.| BlackRock Frontiers vs. Odfjell Drilling | BlackRock Frontiers vs. G5 Entertainment AB | BlackRock Frontiers vs. LBG Media PLC | BlackRock Frontiers vs. MTI Wireless Edge |
| Eastman Chemical vs. Summit Materials Cl | Eastman Chemical vs. Applied Materials | Eastman Chemical vs. Zegona Communications Plc | Eastman Chemical vs. Spirent Communications plc |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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