Correlation Between Collegium Pharmaceutical and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Collegium Pharmaceutical 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 Collegium Pharmaceutical and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Collegium Pharmaceutical and Eastman Chemical, you can compare the effects of market volatilities on Collegium Pharmaceutical 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 Collegium Pharmaceutical with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collegium Pharmaceutical and Eastman Chemical.
Diversification Opportunities for Collegium Pharmaceutical and Eastman Chemical
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Collegium and Eastman is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Collegium Pharmaceutical and Eastman Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Collegium Pharmaceutical 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 Collegium Pharmaceutical 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 Collegium Pharmaceutical i.e., Collegium Pharmaceutical and Eastman Chemical go up and down completely randomly.
Pair Corralation between Collegium Pharmaceutical and Eastman Chemical
Given the investment horizon of 90 days Collegium Pharmaceutical is expected to under-perform the Eastman Chemical. In addition to that, Collegium Pharmaceutical is 1.94 times more volatile than Eastman Chemical. It trades about -0.17 of its total potential returns per unit of risk. Eastman Chemical is currently generating about -0.12 per unit of volatility. If you would invest 11,195 in Eastman Chemical on August 29, 2024 and sell it today you would lose (782.50) from holding Eastman Chemical or give up 6.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Collegium Pharmaceutical vs. Eastman Chemical
Performance |
| Timeline |
| Collegium Pharmaceutical |
| Eastman Chemical |
Collegium Pharmaceutical and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Collegium Pharmaceutical and Eastman Chemical
The main advantage of trading using opposite Collegium Pharmaceutical and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collegium Pharmaceutical 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.| Collegium Pharmaceutical vs. Phibro Animal Health | Collegium Pharmaceutical vs. Procaps Group SA | Collegium Pharmaceutical vs. Amphastar P | Collegium Pharmaceutical vs. Alkermes Plc |
| Eastman Chemical vs. Direxion Daily FTSE | Eastman Chemical vs. Collegium Pharmaceutical | Eastman Chemical vs. KKR Co LP | Eastman Chemical vs. iShares Dividend and |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |