Correlation Between Eastman Chemical and Tradegate
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Tradegate 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 Tradegate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Tradegate AG Wertpapierhandelsbank, you can compare the effects of market volatilities on Eastman Chemical and Tradegate 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 Tradegate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Tradegate.
Diversification Opportunities for Eastman Chemical and Tradegate
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eastman and Tradegate is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Tradegate AG Wertpapierhandels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tradegate AG Wertpap 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 Tradegate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tradegate AG Wertpap has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Tradegate go up and down completely randomly.
Pair Corralation between Eastman Chemical and Tradegate
Assuming the 90 days horizon Eastman Chemical is expected to generate 0.99 times more return on investment than Tradegate. However, Eastman Chemical is 1.01 times less risky than Tradegate. It trades about 0.08 of its potential returns per unit of risk. Tradegate AG Wertpapierhandelsbank is currently generating about -0.05 per unit of risk. If you would invest 7,150 in Eastman Chemical on September 14, 2024 and sell it today you would earn a total of 2,234 from holding Eastman Chemical or generate 31.24% 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. Tradegate AG Wertpapierhandels
Performance |
| Timeline |
| Eastman Chemical |
| Tradegate AG Wertpap |
Eastman Chemical and Tradegate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Tradegate
The main advantage of trading using opposite Eastman Chemical and Tradegate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Tradegate 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 Tradegate will offset losses from the drop in Tradegate's long position.| Eastman Chemical vs. SMA Solar Technology | Eastman Chemical vs. AECOM TECHNOLOGY | Eastman Chemical vs. Cogent Communications Holdings | Eastman Chemical vs. Ribbon Communications |
| Tradegate vs. Superior Plus Corp | Tradegate vs. SIVERS SEMICONDUCTORS AB | Tradegate vs. CHINA HUARONG ENERHD 50 | Tradegate vs. NORDIC HALIBUT AS |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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