Correlation Between Eastman Chemical and Vulcan Materials
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Vulcan Materials 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 Vulcan Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Vulcan Materials, you can compare the effects of market volatilities on Eastman Chemical and Vulcan Materials 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 Vulcan Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Vulcan Materials.
Diversification Opportunities for Eastman Chemical and Vulcan Materials
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eastman and Vulcan is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Vulcan Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Materials 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 Vulcan Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vulcan Materials has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Vulcan Materials go up and down completely randomly.
Pair Corralation between Eastman Chemical and Vulcan Materials
Assuming the 90 days trading horizon Eastman Chemical is expected to generate 0.36 times more return on investment than Vulcan Materials. However, Eastman Chemical is 2.78 times less risky than Vulcan Materials. It trades about 0.22 of its potential returns per unit of risk. Vulcan Materials is currently generating about 0.0 per unit of risk. If you would invest 27,540 in Eastman Chemical on November 6, 2024 and sell it today you would earn a total of 860.00 from holding Eastman Chemical or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastman Chemical vs. Vulcan Materials
Performance |
| Timeline |
| Eastman Chemical |
| Vulcan Materials |
Eastman Chemical and Vulcan Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Vulcan Materials
The main advantage of trading using opposite Eastman Chemical and Vulcan Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Vulcan Materials 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 Vulcan Materials will offset losses from the drop in Vulcan Materials' long position.| Eastman Chemical vs. Clover Health Investments, | Eastman Chemical vs. Check Point Software | Eastman Chemical vs. Take Two Interactive Software | Eastman Chemical vs. Elevance Health, |
| Vulcan Materials vs. Sony Group | Vulcan Materials vs. Energisa SA | Vulcan Materials vs. BTG Pactual Logstica | Vulcan Materials vs. Plano Plano Desenvolvimento |
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
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |