Correlation Between Eastman Chemical and CHEMICAL INDUSTRIES
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and CHEMICAL INDUSTRIES, you can compare the effects of market volatilities on Eastman Chemical and CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and CHEMICAL INDUSTRIES.
Diversification Opportunities for Eastman Chemical and CHEMICAL INDUSTRIES
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eastman and CHEMICAL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and CHEMICAL INDUSTRIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHEMICAL INDUSTRIES has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and CHEMICAL INDUSTRIES go up and down completely randomly.
Pair Corralation between Eastman Chemical and CHEMICAL INDUSTRIES
If you would invest 8,906 in Eastman Chemical on November 28, 2024 and sell it today you would earn a total of 420.00 from holding Eastman Chemical or generate 4.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastman Chemical vs. CHEMICAL INDUSTRIES
Performance |
| Timeline |
| Eastman Chemical |
| CHEMICAL INDUSTRIES |
Eastman Chemical and CHEMICAL INDUSTRIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and CHEMICAL INDUSTRIES
The main advantage of trading using opposite Eastman Chemical and CHEMICAL INDUSTRIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES will offset losses from the drop in CHEMICAL INDUSTRIES's long position.| Eastman Chemical vs. CALTAGIRONE EDITORE | Eastman Chemical vs. USWE SPORTS AB | Eastman Chemical vs. KOBE STEEL LTD | Eastman Chemical vs. Sch Environnement SA |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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