Correlation Between Eastman Chemical and TERADATA
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and TERADATA 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 TERADATA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and TERADATA, you can compare the effects of market volatilities on Eastman Chemical and TERADATA 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 TERADATA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and TERADATA.
Diversification Opportunities for Eastman Chemical and TERADATA
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eastman and TERADATA is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and TERADATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TERADATA 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 TERADATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TERADATA has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and TERADATA go up and down completely randomly.
Pair Corralation between Eastman Chemical and TERADATA
Assuming the 90 days horizon Eastman Chemical is expected to generate 0.69 times more return on investment than TERADATA. However, Eastman Chemical is 1.44 times less risky than TERADATA. It trades about 0.07 of its potential returns per unit of risk. TERADATA is currently generating about -0.31 per unit of risk. If you would invest 8,532 in Eastman Chemical on December 11, 2024 and sell it today you would earn a total of 384.00 from holding Eastman Chemical or generate 4.5% 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. TERADATA
Performance |
| Timeline |
| Eastman Chemical |
| TERADATA |
Eastman Chemical and TERADATA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and TERADATA
The main advantage of trading using opposite Eastman Chemical and TERADATA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, TERADATA 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 TERADATA will offset losses from the drop in TERADATA's long position.| Eastman Chemical vs. Sinopec Shanghai Petrochemical | Eastman Chemical vs. Medical Properties Trust | Eastman Chemical vs. Sanyo Chemical Industries | Eastman Chemical vs. Advanced Medical Solutions |
| TERADATA vs. FUYO GENERAL LEASE | TERADATA vs. SPARTAN STORES | TERADATA vs. ASURE SOFTWARE | TERADATA vs. ALBIS LEASING AG |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |