Correlation Between Eastman Chemical and Sligro Food
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Sligro Food 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 Sligro Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Sligro Food Group, you can compare the effects of market volatilities on Eastman Chemical and Sligro Food 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 Sligro Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Sligro Food.
Diversification Opportunities for Eastman Chemical and Sligro Food
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eastman and Sligro is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food Group 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 Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Sligro Food go up and down completely randomly.
Pair Corralation between Eastman Chemical and Sligro Food
Considering the 90-day investment horizon Eastman Chemical is expected to generate 0.45 times more return on investment than Sligro Food. However, Eastman Chemical is 2.22 times less risky than Sligro Food. It trades about 0.0 of its potential returns per unit of risk. Sligro Food Group is currently generating about -0.21 per unit of risk. If you would invest 10,049 in Eastman Chemical on September 13, 2024 and sell it today you would lose (18.00) from holding Eastman Chemical or give up 0.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastman Chemical vs. Sligro Food Group
Performance |
| Timeline |
| Eastman Chemical |
| Sligro Food Group |
Eastman Chemical and Sligro Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Sligro Food
The main advantage of trading using opposite Eastman Chemical and Sligro Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Sligro Food 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 Sligro Food will offset losses from the drop in Sligro Food's long position.| Eastman Chemical vs. Olin Corporation | Eastman Chemical vs. Cabot | Eastman Chemical vs. Kronos Worldwide | Eastman Chemical vs. LyondellBasell Industries NV |
| Sligro Food vs. Sapiens International | Sligro Food vs. Canlan Ice Sports | Sligro Food vs. Mattel Inc | Sligro Food vs. Playa Hotels Resorts |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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