Correlation Between Eastman Chemical and Sekisui Chemical
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Sekisui Chemical 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 Sekisui Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Sekisui Chemical Co, you can compare the effects of market volatilities on Eastman Chemical and Sekisui Chemical 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 Sekisui Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Sekisui Chemical.
Diversification Opportunities for Eastman Chemical and Sekisui Chemical
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eastman and Sekisui is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Sekisui Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekisui Chemical 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 Sekisui Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekisui Chemical has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Sekisui Chemical go up and down completely randomly.
Pair Corralation between Eastman Chemical and Sekisui Chemical
Assuming the 90 days horizon Eastman Chemical is expected to generate 0.88 times more return on investment than Sekisui Chemical. However, Eastman Chemical is 1.13 times less risky than Sekisui Chemical. It trades about 0.04 of its potential returns per unit of risk. Sekisui Chemical Co is currently generating about 0.03 per unit of risk. If you would invest 7,027 in Eastman Chemical on December 1, 2024 and sell it today you would earn a total of 2,303 from holding Eastman Chemical or generate 32.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastman Chemical vs. Sekisui Chemical Co
Performance |
| Timeline |
| Eastman Chemical |
| Sekisui Chemical |
Eastman Chemical and Sekisui Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Sekisui Chemical
The main advantage of trading using opposite Eastman Chemical and Sekisui Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Sekisui Chemical 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 Sekisui Chemical will offset losses from the drop in Sekisui Chemical's long position.| Eastman Chemical vs. SPORTING | Eastman Chemical vs. Transport International Holdings | Eastman Chemical vs. ProSiebenSat1 Media SE | Eastman Chemical vs. Prosiebensat 1 Media |
| Sekisui Chemical vs. Treasury Wine Estates | Sekisui Chemical vs. CHINA TONTINE WINES | Sekisui Chemical vs. Guangdong Investment Limited | Sekisui Chemical vs. SmarTone Telecommunications Holdings |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |