Correlation Between Eastman Chemical and Playstudios
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Playstudios 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 Playstudios into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Playstudios, you can compare the effects of market volatilities on Eastman Chemical and Playstudios 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 Playstudios. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Playstudios.
Diversification Opportunities for Eastman Chemical and Playstudios
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eastman and Playstudios is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Playstudios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playstudios 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 Playstudios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playstudios has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Playstudios go up and down completely randomly.
Pair Corralation between Eastman Chemical and Playstudios
Considering the 90-day investment horizon Eastman Chemical is expected to under-perform the Playstudios. But the stock apears to be less risky and, when comparing its historical volatility, Eastman Chemical is 2.45 times less risky than Playstudios. The stock trades about -0.01 of its potential returns per unit of risk. The Playstudios is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 139.00 in Playstudios on August 27, 2024 and sell it today you would earn a total of 42.00 from holding Playstudios or generate 30.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastman Chemical vs. Playstudios
Performance |
| Timeline |
| Eastman Chemical |
| Playstudios |
Eastman Chemical and Playstudios Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Playstudios
The main advantage of trading using opposite Eastman Chemical and Playstudios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Playstudios 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 Playstudios will offset losses from the drop in Playstudios' long position.| Eastman Chemical vs. Olin Corporation | Eastman Chemical vs. Cabot | Eastman Chemical vs. Kronos Worldwide | Eastman Chemical vs. LyondellBasell Industries NV |
| Playstudios vs. SohuCom | Playstudios vs. Snail, Class A | Playstudios vs. Playtika Holding Corp | Playstudios vs. Golden Matrix 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |