Correlation Between Eastman Chemical and Trump Media
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Trump Media 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 Trump Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Trump Media Technology, you can compare the effects of market volatilities on Eastman Chemical and Trump Media 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 Trump Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Trump Media.
Diversification Opportunities for Eastman Chemical and Trump Media
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eastman and Trump is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Trump Media Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trump Media Technology 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 Trump Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trump Media Technology has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Trump Media go up and down completely randomly.
Pair Corralation between Eastman Chemical and Trump Media
Considering the 90-day investment horizon Eastman Chemical is expected to generate 1.75 times less return on investment than Trump Media. But when comparing it to its historical volatility, Eastman Chemical is 6.82 times less risky than Trump Media. It trades about 0.13 of its potential returns per unit of risk. Trump Media Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,190 in Trump Media Technology on September 2, 2024 and sell it today you would lose (70.00) from holding Trump Media Technology or give up 3.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastman Chemical vs. Trump Media Technology
Performance |
| Timeline |
| Eastman Chemical |
| Trump Media Technology |
Eastman Chemical and Trump Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Trump Media
The main advantage of trading using opposite Eastman Chemical and Trump Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Trump Media 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 Trump Media will offset losses from the drop in Trump Media'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 |
| Trump Media vs. Sea | Trump Media vs. GMS Inc | Trump Media vs. Cedar Realty Trust | Trump Media vs. Here Media |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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