Correlation Between Eastman Chemical and Vestas Wind
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By analyzing existing cross correlation between Eastman Chemical and Vestas Wind Systems, you can compare the effects of market volatilities on Eastman Chemical and Vestas Wind 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 Vestas Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Vestas Wind.
Diversification Opportunities for Eastman Chemical and Vestas Wind
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eastman and Vestas is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Vestas Wind Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestas Wind Systems 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 Vestas Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestas Wind Systems has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Vestas Wind go up and down completely randomly.
Pair Corralation between Eastman Chemical and Vestas Wind
Assuming the 90 days horizon Eastman Chemical is expected to generate 0.6 times more return on investment than Vestas Wind. However, Eastman Chemical is 1.67 times less risky than Vestas Wind. It trades about 0.06 of its potential returns per unit of risk. Vestas Wind Systems is currently generating about -0.06 per unit of risk. If you would invest 7,344 in Eastman Chemical on August 31, 2024 and sell it today you would earn a total of 2,500 from holding Eastman Chemical or generate 34.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Eastman Chemical vs. Vestas Wind Systems
Performance |
| Timeline |
| Eastman Chemical |
| Vestas Wind Systems |
Eastman Chemical and Vestas Wind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Vestas Wind
The main advantage of trading using opposite Eastman Chemical and Vestas Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Vestas Wind 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 Vestas Wind will offset losses from the drop in Vestas Wind's long position.| Eastman Chemical vs. Jacquet Metal Service | Eastman Chemical vs. Richardson Electronics | Eastman Chemical vs. KIMBALL ELECTRONICS | Eastman Chemical vs. GRIFFIN MINING LTD |
| Vestas Wind vs. Geely Automobile Holdings | Vestas Wind vs. MICRONIC MYDATA | Vestas Wind vs. TERADATA | Vestas Wind vs. CarsalesCom |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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