Correlation Between Eastman Chemical and Rainier Pacific
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Rainier Pacific 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 Rainier Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Rainier Pacific Financial, you can compare the effects of market volatilities on Eastman Chemical and Rainier Pacific 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 Rainier Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Rainier Pacific.
Diversification Opportunities for Eastman Chemical and Rainier Pacific
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eastman and Rainier is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Rainier Pacific Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rainier Pacific Financial 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 Rainier Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rainier Pacific Financial has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Rainier Pacific go up and down completely randomly.
Pair Corralation between Eastman Chemical and Rainier Pacific
If you would invest (100.00) in Rainier Pacific Financial on December 4, 2024 and sell it today you would earn a total of 100.00 from holding Rainier Pacific Financial or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Eastman Chemical vs. Rainier Pacific Financial
Performance |
| Timeline |
| Eastman Chemical |
| Rainier Pacific Financial |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Eastman Chemical and Rainier Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Rainier Pacific
The main advantage of trading using opposite Eastman Chemical and Rainier Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Rainier Pacific 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 Rainier Pacific will offset losses from the drop in Rainier Pacific's long position.| Eastman Chemical vs. Air Products and | Eastman Chemical vs. International Flavors Fragrances | Eastman Chemical vs. Sherwin Williams Co | Eastman Chemical vs. PPG Industries |
| Rainier Pacific vs. Atmos Energy | Rainier Pacific vs. Antero Midstream Partners | Rainier Pacific vs. Mesa Air Group | Rainier Pacific vs. American Electric Power |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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