Correlation Between Eastman Chemical and GungHo Online
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and GungHo Online 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 GungHo Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and GungHo Online Entertainment, you can compare the effects of market volatilities on Eastman Chemical and GungHo Online 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 GungHo Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and GungHo Online.
Diversification Opportunities for Eastman Chemical and GungHo Online
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eastman and GungHo is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and GungHo Online Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GungHo Online Entert 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 GungHo Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GungHo Online Entert has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and GungHo Online go up and down completely randomly.
Pair Corralation between Eastman Chemical and GungHo Online
Assuming the 90 days horizon Eastman Chemical is expected to generate 0.62 times more return on investment than GungHo Online. However, Eastman Chemical is 1.6 times less risky than GungHo Online. It trades about 0.04 of its potential returns per unit of risk. GungHo Online Entertainment is currently generating about -0.05 per unit of risk. If you would invest 9,434 in Eastman Chemical on September 12, 2024 and sell it today you would earn a total of 98.00 from holding Eastman Chemical or generate 1.04% 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. GungHo Online Entertainment
Performance |
| Timeline |
| Eastman Chemical |
| GungHo Online Entert |
Eastman Chemical and GungHo Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and GungHo Online
The main advantage of trading using opposite Eastman Chemical and GungHo Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, GungHo Online 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 GungHo Online will offset losses from the drop in GungHo Online's long position.| Eastman Chemical vs. AIR LIQUIDE ADR | Eastman Chemical vs. Shin Etsu Chemical Co | Eastman Chemical vs. Ganfeng Lithium Co | Eastman Chemical vs. Superior Plus Corp |
| GungHo Online vs. NEXON Co | GungHo Online vs. Take Two Interactive Software | GungHo Online vs. Superior Plus Corp | GungHo Online vs. SIVERS SEMICONDUCTORS AB |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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