Correlation Between Eastman Chemical and FRASERS PROPERTY
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and FRASERS PROPERTY 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 FRASERS PROPERTY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and FRASERS PROPERTY, you can compare the effects of market volatilities on Eastman Chemical and FRASERS PROPERTY 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 FRASERS PROPERTY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and FRASERS PROPERTY.
Diversification Opportunities for Eastman Chemical and FRASERS PROPERTY
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eastman and FRASERS is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and FRASERS PROPERTY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FRASERS PROPERTY 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 FRASERS PROPERTY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FRASERS PROPERTY has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and FRASERS PROPERTY go up and down completely randomly.
Pair Corralation between Eastman Chemical and FRASERS PROPERTY
Assuming the 90 days horizon Eastman Chemical is expected to under-perform the FRASERS PROPERTY. But the stock apears to be less risky and, when comparing its historical volatility, Eastman Chemical is 1.22 times less risky than FRASERS PROPERTY. The stock trades about -0.22 of its potential returns per unit of risk. The FRASERS PROPERTY is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 60.00 in FRASERS PROPERTY on December 8, 2024 and sell it today you would lose (4.00) from holding FRASERS PROPERTY or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Eastman Chemical vs. FRASERS PROPERTY
Performance |
| Timeline |
| Eastman Chemical |
| FRASERS PROPERTY |
Eastman Chemical and FRASERS PROPERTY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and FRASERS PROPERTY
The main advantage of trading using opposite Eastman Chemical and FRASERS PROPERTY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, FRASERS PROPERTY 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 FRASERS PROPERTY will offset losses from the drop in FRASERS PROPERTY's long position.| Eastman Chemical vs. THORNEY TECHS LTD | ||
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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