Correlation Between Eastman Chemical and A SPAC
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and A SPAC 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 A SPAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and A SPAC II, you can compare the effects of market volatilities on Eastman Chemical and A SPAC 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 A SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and A SPAC.
Diversification Opportunities for Eastman Chemical and A SPAC
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eastman and ASUUF is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and A SPAC II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A SPAC II 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 A SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A SPAC II has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and A SPAC go up and down completely randomly.
Pair Corralation between Eastman Chemical and A SPAC
Considering the 90-day investment horizon Eastman Chemical is expected to generate 2.63 times more return on investment than A SPAC. However, Eastman Chemical is 2.63 times more volatile than A SPAC II. It trades about 0.04 of its potential returns per unit of risk. A SPAC II is currently generating about -0.16 per unit of risk. If you would invest 8,193 in Eastman Chemical on September 3, 2024 and sell it today you would earn a total of 2,279 from holding Eastman Chemical or generate 27.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 10.51% |
| Values | Daily Returns |
Eastman Chemical vs. A SPAC II
Performance |
| Timeline |
| Eastman Chemical |
| A SPAC II |
Eastman Chemical and A SPAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and A SPAC
The main advantage of trading using opposite Eastman Chemical and A SPAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, A SPAC 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 A SPAC will offset losses from the drop in A SPAC's long position.| Eastman Chemical vs. SPACE | Eastman Chemical vs. Bayview Acquisition Corp | Eastman Chemical vs. T Rowe Price | Eastman Chemical vs. Ampleforth |
| A SPAC vs. CF Industries Holdings | A SPAC vs. Eastman Chemical | A SPAC vs. Codexis | A SPAC vs. Axalta Coating Systems |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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