Correlation Between Eastman Chemical and Unity Software
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Unity Software 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 Unity Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Unity Software, you can compare the effects of market volatilities on Eastman Chemical and Unity Software 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 Unity Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Unity Software.
Diversification Opportunities for Eastman Chemical and Unity Software
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eastman and Unity is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Unity Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unity Software 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 Unity Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unity Software has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Unity Software go up and down completely randomly.
Pair Corralation between Eastman Chemical and Unity Software
If you would invest 27,540 in Eastman Chemical on October 23, 2024 and sell it today you would earn a total of 0.00 from holding Eastman Chemical or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastman Chemical vs. Unity Software
Performance |
| Timeline |
| Eastman Chemical |
| Unity Software |
Eastman Chemical and Unity Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Unity Software
The main advantage of trading using opposite Eastman Chemical and Unity Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Unity Software 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 Unity Software will offset losses from the drop in Unity Software's long position.| Eastman Chemical vs. STAG Industrial, | Eastman Chemical vs. Globus Medical, | Eastman Chemical vs. Zoom Video Communications | Eastman Chemical vs. Nordon Indstrias Metalrgicas |
| Unity Software vs. G2D Investments | Unity Software vs. Eastman Chemical | Unity Software vs. Patria Investments Limited | Unity Software vs. STAG Industrial, |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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