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
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eastman and TERADATA is -0.03. 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 0.7 times more return on investment than TERADATA. However, Eastman Chemical is 1.44 times less risky than TERADATA. It trades about 0.05 of its potential returns per unit of risk. TERADATA is currently generating about -0.04 per unit of risk. If you would invest 7,853 in Eastman Chemical on September 20, 2024 and sell it today you would earn a total of 1,265 from holding Eastman Chemical or generate 16.11% 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. AIR LIQUIDE ADR | Eastman Chemical vs. Ganfeng Lithium Co | Eastman Chemical vs. Superior Plus Corp | Eastman Chemical vs. SIVERS SEMICONDUCTORS AB |
| TERADATA vs. WIZZ AIR HLDGUNSPADR4 | TERADATA vs. Eastman Chemical | TERADATA vs. Alaska Air Group | TERADATA vs. NORWEGIAN AIR SHUT |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |