Correlation Between Eastman Chemical and Joint Stock
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Joint Stock 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 Joint Stock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Joint Stock, you can compare the effects of market volatilities on Eastman Chemical and Joint Stock 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 Joint Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Joint Stock.
Diversification Opportunities for Eastman Chemical and Joint Stock
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eastman and Joint is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Joint Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joint Stock 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 Joint Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joint Stock has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Joint Stock go up and down completely randomly.
Pair Corralation between Eastman Chemical and Joint Stock
Considering the 90-day investment horizon Eastman Chemical is expected to generate 1.1 times less return on investment than Joint Stock. But when comparing it to its historical volatility, Eastman Chemical is 1.85 times less risky than Joint Stock. It trades about 0.07 of its potential returns per unit of risk. Joint Stock is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 8,824 in Joint Stock on September 4, 2024 and sell it today you would earn a total of 1,678 from holding Joint Stock or generate 19.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Eastman Chemical vs. Joint Stock
Performance |
| Timeline |
| Eastman Chemical |
| Joint Stock |
Eastman Chemical and Joint Stock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Joint Stock
The main advantage of trading using opposite Eastman Chemical and Joint Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Joint Stock 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 Joint Stock will offset losses from the drop in Joint Stock's long position.| Eastman Chemical vs. Olin Corporation | Eastman Chemical vs. Cabot | Eastman Chemical vs. Kronos Worldwide | Eastman Chemical vs. LyondellBasell Industries NV |
| Joint Stock vs. Mativ Holdings | Joint Stock vs. Avient Corp | Joint Stock vs. Eastman Chemical | Joint Stock vs. Ecoloclean Industrs |
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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