Correlation Between Eastman Chemical and CSSC Offshore
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and CSSC Offshore 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 CSSC Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and CSSC Offshore Marine, you can compare the effects of market volatilities on Eastman Chemical and CSSC Offshore 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 CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and CSSC Offshore.
Diversification Opportunities for Eastman Chemical and CSSC Offshore
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eastman and CSSC is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and CSSC Offshore Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSSC Offshore Marine 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 CSSC Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSSC Offshore Marine has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and CSSC Offshore go up and down completely randomly.
Pair Corralation between Eastman Chemical and CSSC Offshore
Assuming the 90 days horizon Eastman Chemical is expected to under-perform the CSSC Offshore. But the stock apears to be less risky and, when comparing its historical volatility, Eastman Chemical is 2.34 times less risky than CSSC Offshore. The stock trades about -0.01 of its potential returns per unit of risk. The CSSC Offshore Marine is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 134.00 in CSSC Offshore Marine on August 25, 2024 and sell it today you would earn a total of 1.00 from holding CSSC Offshore Marine or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastman Chemical vs. CSSC Offshore Marine
Performance |
| Timeline |
| Eastman Chemical |
| CSSC Offshore Marine |
Eastman Chemical and CSSC Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and CSSC Offshore
The main advantage of trading using opposite Eastman Chemical and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, CSSC Offshore 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 CSSC Offshore will offset losses from the drop in CSSC Offshore's long position.| Eastman Chemical vs. Sociedad Qumica y | Eastman Chemical vs. Superior Plus Corp | Eastman Chemical vs. NMI Holdings | Eastman Chemical vs. Origin Agritech |
| CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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