Correlation Between Eastman Chemical and Dupont De
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Dupont De 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 Dupont De into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Dupont De Nemours, you can compare the effects of market volatilities on Eastman Chemical and Dupont De 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 Dupont De. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Dupont De.
Diversification Opportunities for Eastman Chemical and Dupont De
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eastman and Dupont is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Dupont De Nemours in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dupont De Nemours 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 Dupont De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dupont De Nemours has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Dupont De go up and down completely randomly.
Pair Corralation between Eastman Chemical and Dupont De
Considering the 90-day investment horizon Eastman Chemical is expected to under-perform the Dupont De. In addition to that, Eastman Chemical is 1.04 times more volatile than Dupont De Nemours. It trades about -0.08 of its total potential returns per unit of risk. Dupont De Nemours is currently generating about -0.07 per unit of volatility. If you would invest 8,489 in Dupont De Nemours on August 23, 2024 and sell it today you would lose (214.00) from holding Dupont De Nemours or give up 2.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastman Chemical vs. Dupont De Nemours
Performance |
| Timeline |
| Eastman Chemical |
| Dupont De Nemours |
Eastman Chemical and Dupont De Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Dupont De
The main advantage of trading using opposite Eastman Chemical and Dupont De positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Dupont De 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 Dupont De will offset losses from the drop in Dupont De's long position.| Eastman Chemical vs. Air Products and | Eastman Chemical vs. International Flavors Fragrances | Eastman Chemical vs. Sherwin Williams Co | Eastman Chemical vs. PPG Industries |
| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. LyondellBasell Industries NV | Dupont De vs. Air Products and |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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