Correlation Between Eastman Chemical and Dundee Sustainable
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Dundee Sustainable 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 Dundee Sustainable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Dundee Sustainable Technologies, you can compare the effects of market volatilities on Eastman Chemical and Dundee Sustainable 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 Dundee Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Dundee Sustainable.
Diversification Opportunities for Eastman Chemical and Dundee Sustainable
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eastman and Dundee is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Dundee Sustainable Technologie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dundee Sustainable 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 Dundee Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dundee Sustainable has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Dundee Sustainable go up and down completely randomly.
Pair Corralation between Eastman Chemical and Dundee Sustainable
Considering the 90-day investment horizon Eastman Chemical is expected to generate 2.58 times more return on investment than Dundee Sustainable. However, Eastman Chemical is 2.58 times more volatile than Dundee Sustainable Technologies. It trades about 0.04 of its potential returns per unit of risk. Dundee Sustainable Technologies is currently generating about -0.09 per unit of risk. If you would invest 7,746 in Eastman Chemical on September 14, 2024 and sell it today you would earn a total of 2,080 from holding Eastman Chemical or generate 26.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 27.07% |
| Values | Daily Returns |
Eastman Chemical vs. Dundee Sustainable Technologie
Performance |
| Timeline |
| Eastman Chemical |
| Dundee Sustainable |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Eastman Chemical and Dundee Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Dundee Sustainable
The main advantage of trading using opposite Eastman Chemical and Dundee Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Dundee Sustainable 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 Dundee Sustainable will offset losses from the drop in Dundee Sustainable's long position.| Eastman Chemical vs. Olin Corporation | Eastman Chemical vs. Cabot | Eastman Chemical vs. Kronos Worldwide | Eastman Chemical vs. LyondellBasell Industries NV |
| Dundee Sustainable vs. Zedge Inc | Dundee Sustainable vs. Codexis | Dundee Sustainable vs. Eastman Chemical | Dundee Sustainable vs. Radcom |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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