Correlation Between Core Molding and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Core Molding 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 Core Molding and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Core Molding Technologies and Eastman Chemical, you can compare the effects of market volatilities on Core Molding 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 Core Molding with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Molding and Eastman Chemical.
Diversification Opportunities for Core Molding and Eastman Chemical
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Core and Eastman is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Core Molding Technologies and Eastman Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Core Molding 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 Core Molding Technologies 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 Core Molding i.e., Core Molding and Eastman Chemical go up and down completely randomly.
Pair Corralation between Core Molding and Eastman Chemical
Considering the 90-day investment horizon Core Molding is expected to generate 6.44 times less return on investment than Eastman Chemical. In addition to that, Core Molding is 1.99 times more volatile than Eastman Chemical. It trades about 0.01 of its total potential returns per unit of risk. Eastman Chemical is currently generating about 0.06 per unit of volatility. If you would invest 8,762 in Eastman Chemical on August 25, 2024 and sell it today you would earn a total of 1,797 from holding Eastman Chemical or generate 20.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Core Molding Technologies vs. Eastman Chemical
Performance |
| Timeline |
| Core Molding Technologies |
| Eastman Chemical |
Core Molding and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Core Molding and Eastman Chemical
The main advantage of trading using opposite Core Molding and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Molding 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.| Core Molding vs. Innospec | Core Molding vs. H B Fuller | Core Molding vs. Quaker Chemical | Core Molding vs. Minerals Technologies |
| Eastman Chemical vs. Olin Corporation | Eastman Chemical vs. Cabot | Eastman Chemical vs. Kronos Worldwide | Eastman Chemical vs. LyondellBasell Industries NV |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Global Correlations Find global opportunities by holding instruments from different markets |