Correlation Between Eastman Chemical and Globavend Holdings
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Globavend Holdings 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 Globavend Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Globavend Holdings Limited, you can compare the effects of market volatilities on Eastman Chemical and Globavend Holdings 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 Globavend Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Globavend Holdings.
Diversification Opportunities for Eastman Chemical and Globavend Holdings
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eastman and Globavend is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Globavend Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globavend Holdings 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 Globavend Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globavend Holdings has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Globavend Holdings go up and down completely randomly.
Pair Corralation between Eastman Chemical and Globavend Holdings
Considering the 90-day investment horizon Eastman Chemical is expected to generate 1.43 times less return on investment than Globavend Holdings. But when comparing it to its historical volatility, Eastman Chemical is 3.67 times less risky than Globavend Holdings. It trades about 0.08 of its potential returns per unit of risk. Globavend Holdings Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 71.00 in Globavend Holdings Limited on August 28, 2024 and sell it today you would earn a total of 1.00 from holding Globavend Holdings Limited or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastman Chemical vs. Globavend Holdings Limited
Performance |
| Timeline |
| Eastman Chemical |
| Globavend Holdings |
Eastman Chemical and Globavend Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Globavend Holdings
The main advantage of trading using opposite Eastman Chemical and Globavend Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Globavend Holdings 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 Globavend Holdings will offset losses from the drop in Globavend Holdings' long position.| Eastman Chemical vs. Olin Corporation | Eastman Chemical vs. Cabot | Eastman Chemical vs. Kronos Worldwide | Eastman Chemical vs. LyondellBasell Industries NV |
| Globavend Holdings vs. Asure Software | Globavend Holdings vs. Eastman Chemical | Globavend Holdings vs. Analog Devices | Globavend Holdings vs. Arrow Electronics |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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