Correlation Between Eastman Chemical and Alfa Financial
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Alfa Financial 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 Alfa Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Alfa Financial Software, you can compare the effects of market volatilities on Eastman Chemical and Alfa Financial 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 Alfa Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Alfa Financial.
Diversification Opportunities for Eastman Chemical and Alfa Financial
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eastman and Alfa is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial Software 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 Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Alfa Financial go up and down completely randomly.
Pair Corralation between Eastman Chemical and Alfa Financial
Assuming the 90 days horizon Eastman Chemical is expected to generate 0.81 times more return on investment than Alfa Financial. However, Eastman Chemical is 1.24 times less risky than Alfa Financial. It trades about 0.1 of its potential returns per unit of risk. Alfa Financial Software is currently generating about 0.04 per unit of risk. If you would invest 9,700 in Eastman Chemical on August 30, 2024 and sell it today you would earn a total of 370.00 from holding Eastman Chemical or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Eastman Chemical vs. Alfa Financial Software
Performance |
| Timeline |
| Eastman Chemical |
| Alfa Financial Software |
Eastman Chemical and Alfa Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Alfa Financial
The main advantage of trading using opposite Eastman Chemical and Alfa Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Alfa Financial 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 Alfa Financial will offset losses from the drop in Alfa Financial's long position.| Eastman Chemical vs. COPLAND ROAD CAPITAL | Eastman Chemical vs. Transport International Holdings | Eastman Chemical vs. Liberty Broadband | Eastman Chemical vs. GRIFFIN MINING LTD |
| Alfa Financial vs. MOVIE GAMES SA | Alfa Financial vs. Haverty Furniture Companies | Alfa Financial vs. American Homes 4 | Alfa Financial vs. INVITATION HOMES DL |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |