Correlation Between Eastman Chemical and Identiv

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Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Identiv 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 Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Identiv, you can compare the effects of market volatilities on Eastman Chemical and Identiv 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 Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Identiv.

Diversification Opportunities for Eastman Chemical and Identiv

EastmanIdentivDiversified AwayEastmanIdentivDiversified Away100%
0.11
  Correlation Coefficient

Average diversification

The 3 months correlation between Eastman and Identiv is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv 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 Identiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Identiv has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Identiv go up and down completely randomly.

Pair Corralation between Eastman Chemical and Identiv

Assuming the 90 days horizon Eastman Chemical is expected to generate 0.54 times more return on investment than Identiv. However, Eastman Chemical is 1.86 times less risky than Identiv. It trades about 0.21 of its potential returns per unit of risk. Identiv is currently generating about -0.05 per unit of risk. If you would invest  8,768  in Eastman Chemical on November 23, 2024 and sell it today you would earn a total of  1,080  from holding Eastman Chemical or generate 12.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Eastman Chemical  vs.  Identiv

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -5051015
JavaScript chart by amCharts 3.21.15EAC INVN
       Timeline  
Eastman Chemical 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Over the last 90 days Eastman Chemical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Eastman Chemical is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb86889092949698100
Identiv 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Identiv has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3.23.33.43.53.63.73.83.94

Eastman Chemical and Identiv Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.76-3.56-2.37-1.170.01.232.473.74.94 0.050.100.15
JavaScript chart by amCharts 3.21.15EAC INVN
       Returns  

Pair Trading with Eastman Chemical and Identiv

The main advantage of trading using opposite Eastman Chemical and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Identiv 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 Identiv will offset losses from the drop in Identiv's long position.
The idea behind Eastman Chemical and Identiv pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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