Correlation Between Eastman Chemical and Nexus Gold
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Nexus Gold 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 Nexus Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Nexus Gold Corp, you can compare the effects of market volatilities on Eastman Chemical and Nexus Gold 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 Nexus Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Nexus Gold.
Diversification Opportunities for Eastman Chemical and Nexus Gold
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eastman and Nexus is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Nexus Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexus Gold Corp 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 Nexus Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexus Gold Corp has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Nexus Gold go up and down completely randomly.
Pair Corralation between Eastman Chemical and Nexus Gold
Considering the 90-day investment horizon Eastman Chemical is expected to generate 206.92 times less return on investment than Nexus Gold. But when comparing it to its historical volatility, Eastman Chemical is 66.21 times less risky than Nexus Gold. It trades about 0.04 of its potential returns per unit of risk. Nexus Gold Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Nexus Gold Corp on September 3, 2024 and sell it today you would lose (10.00) from holding Nexus Gold Corp or give up 90.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 28.69% |
| Values | Daily Returns |
Eastman Chemical vs. Nexus Gold Corp
Performance |
| Timeline |
| Eastman Chemical |
| Nexus Gold Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Eastman Chemical and Nexus Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Nexus Gold
The main advantage of trading using opposite Eastman Chemical and Nexus Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Nexus Gold 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 Nexus Gold will offset losses from the drop in Nexus Gold's long position.| Eastman Chemical vs. SPACE | Eastman Chemical vs. Bayview Acquisition Corp | Eastman Chemical vs. T Rowe Price | Eastman Chemical vs. Ampleforth |
| Nexus Gold vs. Flexible Solutions International | Nexus Gold vs. Grupo Simec SAB | Nexus Gold vs. Eastman Chemical | Nexus Gold vs. CECO Environmental Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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