Correlation Between Eastman Chemical and California-Engels
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and California-Engels 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 California-Engels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and California Engels Mining, you can compare the effects of market volatilities on Eastman Chemical and California-Engels 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 California-Engels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and California-Engels.
Diversification Opportunities for Eastman Chemical and California-Engels
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eastman and California-Engels is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and California Engels Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Engels Mining 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 California-Engels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Engels Mining has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and California-Engels go up and down completely randomly.
Pair Corralation between Eastman Chemical and California-Engels
If you would invest 10,005 in Eastman Chemical on September 4, 2024 and sell it today you would earn a total of 422.00 from holding Eastman Chemical or generate 4.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Eastman Chemical vs. California Engels Mining
Performance |
| Timeline |
| Eastman Chemical |
| California Engels Mining |
Eastman Chemical and California-Engels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and California-Engels
The main advantage of trading using opposite Eastman Chemical and California-Engels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, California-Engels 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 California-Engels will offset losses from the drop in California-Engels' long position.| Eastman Chemical vs. Olin Corporation | Eastman Chemical vs. Cabot | Eastman Chemical vs. Kronos Worldwide | Eastman Chemical vs. LyondellBasell Industries NV |
| California-Engels vs. Timken Company | California-Engels vs. Weyco Group | California-Engels vs. Eastman Chemical | California-Engels vs. CF Industries 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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