Correlation Between Eastman Chemical and Daito Trust
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Daito Trust 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 Daito Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Daito Trust Construction, you can compare the effects of market volatilities on Eastman Chemical and Daito Trust 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 Daito Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Daito Trust.
Diversification Opportunities for Eastman Chemical and Daito Trust
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eastman and Daito is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Daito Trust Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daito Trust Construction 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 Daito Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daito Trust Construction has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Daito Trust go up and down completely randomly.
Pair Corralation between Eastman Chemical and Daito Trust
Assuming the 90 days horizon Eastman Chemical is expected to generate 1.14 times more return on investment than Daito Trust. However, Eastman Chemical is 1.14 times more volatile than Daito Trust Construction. It trades about 0.03 of its potential returns per unit of risk. Daito Trust Construction is currently generating about -0.07 per unit of risk. If you would invest 8,947 in Eastman Chemical on November 28, 2024 and sell it today you would earn a total of 379.00 from holding Eastman Chemical or generate 4.24% 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. Daito Trust Construction
Performance |
| Timeline |
| Eastman Chemical |
| Daito Trust Construction |
Eastman Chemical and Daito Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Daito Trust
The main advantage of trading using opposite Eastman Chemical and Daito Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Daito Trust 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 Daito Trust will offset losses from the drop in Daito Trust's long position.| Eastman Chemical vs. CALTAGIRONE EDITORE | Eastman Chemical vs. USWE SPORTS AB | Eastman Chemical vs. KOBE STEEL LTD | Eastman Chemical vs. Sch Environnement SA |
| Daito Trust vs. DETALION GAMES SA | Daito Trust vs. PLAYMATES TOYS | Daito Trust vs. INVITATION HOMES DL | Daito Trust vs. MOVIE GAMES SA |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |