Correlation Between Eastman Chemical and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Samsung Electronics 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 Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Samsung Electronics Co, you can compare the effects of market volatilities on Eastman Chemical and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Samsung Electronics.
Diversification Opportunities for Eastman Chemical and Samsung Electronics
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eastman and Samsung is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Samsung Electronics go up and down completely randomly.
Pair Corralation between Eastman Chemical and Samsung Electronics
Assuming the 90 days horizon Eastman Chemical is expected to generate 0.67 times more return on investment than Samsung Electronics. However, Eastman Chemical is 1.49 times less risky than Samsung Electronics. It trades about 0.1 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.02 per unit of risk. If you would invest 6,757 in Eastman Chemical on August 25, 2024 and sell it today you would earn a total of 2,813 from holding Eastman Chemical or generate 41.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastman Chemical vs. Samsung Electronics Co
Performance |
| Timeline |
| Eastman Chemical |
| Samsung Electronics |
Eastman Chemical and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Samsung Electronics
The main advantage of trading using opposite Eastman Chemical and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Eastman Chemical vs. Sociedad Qumica y | Eastman Chemical vs. Superior Plus Corp | Eastman Chemical vs. NMI Holdings | Eastman Chemical vs. Origin Agritech |
| Samsung Electronics vs. KINGBOARD CHEMICAL | Samsung Electronics vs. ScanSource | Samsung Electronics vs. GEAR4MUSIC LS 10 | Samsung Electronics vs. Eastman Chemical |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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