Correlation Between Eastman Chemical and T Mobile
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and T Mobile 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 Eastman Chemical and T Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and T Mobile, you can compare the effects of market volatilities on Eastman Chemical and T Mobile 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 Eastman Chemical with a short position of T Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and T Mobile.
Diversification Opportunities for Eastman Chemical and T Mobile
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eastman and T1MU34 is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile and Eastman Chemical 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 Eastman Chemical are associated (or correlated) with T Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Mobile has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and T Mobile go up and down completely randomly.
Pair Corralation between Eastman Chemical and T Mobile
Assuming the 90 days trading horizon Eastman Chemical is expected to generate 0.05 times more return on investment than T Mobile. However, Eastman Chemical is 19.7 times less risky than T Mobile. It trades about 0.16 of its potential returns per unit of risk. T Mobile is currently generating about -0.06 per unit of risk. If you would invest 27,365 in Eastman Chemical on October 11, 2024 and sell it today you would earn a total of 175.00 from holding Eastman Chemical or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.37% |
| Values | Daily Returns |
Eastman Chemical vs. T Mobile
Performance |
| Timeline |
| Eastman Chemical |
| T Mobile |
Eastman Chemical and T Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and T Mobile
The main advantage of trading using opposite Eastman Chemical and T Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, T Mobile 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 T Mobile will offset losses from the drop in T Mobile's long position.| Eastman Chemical vs. JB Hunt Transport | Eastman Chemical vs. Micron Technology | Eastman Chemical vs. Cognizant Technology Solutions | Eastman Chemical vs. DENTSPLY SIRONA |
| T Mobile vs. Autohome | T Mobile vs. Hormel Foods | T Mobile vs. Eastman Chemical | T Mobile vs. Zoom Video Communications |
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 CEOs Directory module to screen CEOs from public companies around the world.
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