Correlation Between Eastman Chemical and Isonics
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Isonics 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 Isonics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Isonics, you can compare the effects of market volatilities on Eastman Chemical and Isonics 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 Isonics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Isonics.
Diversification Opportunities for Eastman Chemical and Isonics
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eastman and Isonics is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Isonics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Isonics 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 Isonics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Isonics has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Isonics go up and down completely randomly.
Pair Corralation between Eastman Chemical and Isonics
Considering the 90-day investment horizon Eastman Chemical is expected to generate 2965.4 times less return on investment than Isonics. But when comparing it to its historical volatility, Eastman Chemical is 289.13 times less risky than Isonics. It trades about 0.04 of its potential returns per unit of risk. Isonics is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Isonics on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Isonics or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 1.01% |
| Values | Daily Returns |
Eastman Chemical vs. Isonics
Performance |
| Timeline |
| Eastman Chemical |
| Isonics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Eastman Chemical and Isonics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Isonics
The main advantage of trading using opposite Eastman Chemical and Isonics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Isonics 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 Isonics will offset losses from the drop in Isonics' long position.| Eastman Chemical vs. Olin Corporation | Eastman Chemical vs. Cabot | Eastman Chemical vs. Kronos Worldwide | Eastman Chemical vs. LyondellBasell Industries NV |
| Isonics vs. Eastman Chemical | Isonics vs. Luxfer Holdings PLC | Isonics vs. Hudson Technologies | Isonics vs. Freedom Internet Group |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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