Correlation Between Eastman Chemical and Inflection Point
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Inflection Point 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 Inflection Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Inflection Point Acquisition, you can compare the effects of market volatilities on Eastman Chemical and Inflection Point 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 Inflection Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Inflection Point.
Diversification Opportunities for Eastman Chemical and Inflection Point
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eastman and Inflection is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Inflection Point Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflection Point Acq 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 Inflection Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflection Point Acq has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Inflection Point go up and down completely randomly.
Pair Corralation between Eastman Chemical and Inflection Point
Considering the 90-day investment horizon Eastman Chemical is expected to generate 198.09 times less return on investment than Inflection Point. But when comparing it to its historical volatility, Eastman Chemical is 27.07 times less risky than Inflection Point. It trades about 0.01 of its potential returns per unit of risk. Inflection Point Acquisition is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Inflection Point Acquisition on January 17, 2025 and sell it today you would earn a total of 1,057 from holding Inflection Point Acquisition or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.52% |
| Values | Daily Returns |
Eastman Chemical vs. Inflection Point Acquisition
Performance |
| Timeline |
| Eastman Chemical |
| Inflection Point Acq |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Eastman Chemical and Inflection Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Inflection Point
The main advantage of trading using opposite Eastman Chemical and Inflection Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Inflection Point 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 Inflection Point will offset losses from the drop in Inflection Point'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 |
| Inflection Point vs. PennantPark Floating Rate | Inflection Point vs. Stepstone Group | Inflection Point vs. Highway Holdings Limited | Inflection Point vs. Simpson Manufacturing |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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