Correlation Between Eastman Chemical and Crown Proptech
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Crown Proptech 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 Crown Proptech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Crown Proptech Acquisitions, you can compare the effects of market volatilities on Eastman Chemical and Crown Proptech 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 Crown Proptech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Crown Proptech.
Diversification Opportunities for Eastman Chemical and Crown Proptech
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eastman and Crown is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Crown Proptech Acquisitions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Proptech Acqui 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 Crown Proptech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Proptech Acqui has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Crown Proptech go up and down completely randomly.
Pair Corralation between Eastman Chemical and Crown Proptech
Considering the 90-day investment horizon Eastman Chemical is expected to generate 1252.47 times less return on investment than Crown Proptech. But when comparing it to its historical volatility, Eastman Chemical is 172.51 times less risky than Crown Proptech. It trades about 0.04 of its potential returns per unit of risk. Crown Proptech Acquisitions is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Crown Proptech Acquisitions on September 4, 2024 and sell it today you would earn a total of 2.09 from holding Crown Proptech Acquisitions or generate 20900.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.28% |
| Values | Daily Returns |
Eastman Chemical vs. Crown Proptech Acquisitions
Performance |
| Timeline |
| Eastman Chemical |
| Crown Proptech Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Eastman Chemical and Crown Proptech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Crown Proptech
The main advantage of trading using opposite Eastman Chemical and Crown Proptech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Crown Proptech 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 Crown Proptech will offset losses from the drop in Crown Proptech's long position.| Eastman Chemical vs. Olin Corporation | Eastman Chemical vs. Cabot | Eastman Chemical vs. Kronos Worldwide | Eastman Chemical vs. LyondellBasell Industries NV |
| Crown Proptech vs. Compania Cervecerias Unidas | Crown Proptech vs. Suntory Beverage Food | Crown Proptech vs. Vita Coco | Crown Proptech vs. The Coca Cola |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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