Correlation Between Eastman Chemical and Micro Imaging
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Micro Imaging 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 Micro Imaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Micro Imaging Technology, you can compare the effects of market volatilities on Eastman Chemical and Micro Imaging 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 Micro Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Micro Imaging.
Diversification Opportunities for Eastman Chemical and Micro Imaging
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eastman and Micro is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Micro Imaging Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micro Imaging Technology 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 Micro Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micro Imaging Technology has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Micro Imaging go up and down completely randomly.
Pair Corralation between Eastman Chemical and Micro Imaging
Considering the 90-day investment horizon Eastman Chemical is expected to generate 0.33 times more return on investment than Micro Imaging. However, Eastman Chemical is 3.08 times less risky than Micro Imaging. It trades about 0.05 of its potential returns per unit of risk. Micro Imaging Technology is currently generating about -0.06 per unit of risk. If you would invest 8,568 in Eastman Chemical on September 12, 2024 and sell it today you would earn a total of 1,365 from holding Eastman Chemical or generate 15.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastman Chemical vs. Micro Imaging Technology
Performance |
| Timeline |
| Eastman Chemical |
| Micro Imaging Technology |
Eastman Chemical and Micro Imaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Micro Imaging
The main advantage of trading using opposite Eastman Chemical and Micro Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Micro Imaging 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 Micro Imaging will offset losses from the drop in Micro Imaging's long position.| Eastman Chemical vs. Griffon | Eastman Chemical vs. Merck Company | Eastman Chemical vs. Brinker International | Eastman Chemical vs. Alcoa Corp |
| Micro Imaging vs. HUMANA INC | Micro Imaging vs. Barloworld Ltd ADR | Micro Imaging vs. Morningstar Unconstrained Allocation | Micro Imaging vs. Thrivent High Yield |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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