Correlation Between Eastman Chemical and Mountain Crest
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Mountain Crest 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 Mountain Crest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Mountain Crest Acquisition, you can compare the effects of market volatilities on Eastman Chemical and Mountain Crest 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 Mountain Crest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Mountain Crest.
Diversification Opportunities for Eastman Chemical and Mountain Crest
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eastman and Mountain is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Mountain Crest Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mountain Crest Acqui 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 Mountain Crest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mountain Crest Acqui has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Mountain Crest go up and down completely randomly.
Pair Corralation between Eastman Chemical and Mountain Crest
If you would invest (100.00) in Mountain Crest Acquisition on September 1, 2024 and sell it today you would earn a total of 100.00 from holding Mountain Crest Acquisition or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Eastman Chemical vs. Mountain Crest Acquisition
Performance |
| Timeline |
| Eastman Chemical |
| Mountain Crest Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Eastman Chemical and Mountain Crest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Mountain Crest
The main advantage of trading using opposite Eastman Chemical and Mountain Crest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Mountain Crest 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 Mountain Crest will offset losses from the drop in Mountain Crest's long position.| Eastman Chemical vs. Olin Corporation | Eastman Chemical vs. Cabot | Eastman Chemical vs. Kronos Worldwide | Eastman Chemical vs. LyondellBasell Industries NV |
| Mountain Crest vs. Arrow Electronics | Mountain Crest vs. Inflection Point Acquisition | Mountain Crest vs. Stepstone Group | Mountain Crest vs. Pinterest |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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