Correlation Between Eastman Chemical and ADRIATIC METALS
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and ADRIATIC METALS 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 ADRIATIC METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and ADRIATIC METALS LS 013355, you can compare the effects of market volatilities on Eastman Chemical and ADRIATIC METALS 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 ADRIATIC METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and ADRIATIC METALS.
Diversification Opportunities for Eastman Chemical and ADRIATIC METALS
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eastman and ADRIATIC is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and ADRIATIC METALS LS 013355 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADRIATIC METALS LS 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 ADRIATIC METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADRIATIC METALS LS has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and ADRIATIC METALS go up and down completely randomly.
Pair Corralation between Eastman Chemical and ADRIATIC METALS
Assuming the 90 days horizon Eastman Chemical is expected to generate 0.59 times more return on investment than ADRIATIC METALS. However, Eastman Chemical is 1.69 times less risky than ADRIATIC METALS. It trades about 0.07 of its potential returns per unit of risk. ADRIATIC METALS LS 013355 is currently generating about 0.04 per unit of risk. If you would invest 9,606 in Eastman Chemical on September 1, 2024 and sell it today you would earn a total of 238.00 from holding Eastman Chemical or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastman Chemical vs. ADRIATIC METALS LS 013355
Performance |
| Timeline |
| Eastman Chemical |
| ADRIATIC METALS LS |
Eastman Chemical and ADRIATIC METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and ADRIATIC METALS
The main advantage of trading using opposite Eastman Chemical and ADRIATIC METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, ADRIATIC METALS 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 ADRIATIC METALS will offset losses from the drop in ADRIATIC METALS's long position.| Eastman Chemical vs. POWER METALS | Eastman Chemical vs. AOYAMA TRADING | Eastman Chemical vs. Genco Shipping Trading | Eastman Chemical vs. Kaiser Aluminum |
| ADRIATIC METALS vs. PUBLIC STORAGE PRFO | ADRIATIC METALS vs. BE Semiconductor Industries | ADRIATIC METALS vs. Datang International Power | ADRIATIC METALS vs. Elmos Semiconductor SE |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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