Correlation Between Eastman Chemical and Space Communication
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Space Communication 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 Space Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Space Communication, you can compare the effects of market volatilities on Eastman Chemical and Space Communication 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 Space Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Space Communication.
Diversification Opportunities for Eastman Chemical and Space Communication
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eastman and Space is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Space Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Space Communication 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 Space Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Space Communication has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Space Communication go up and down completely randomly.
Pair Corralation between Eastman Chemical and Space Communication
Considering the 90-day investment horizon Eastman Chemical is expected to generate 0.41 times more return on investment than Space Communication. However, Eastman Chemical is 2.43 times less risky than Space Communication. It trades about 0.04 of its potential returns per unit of risk. Space Communication is currently generating about -0.04 per unit of risk. If you would invest 8,005 in Eastman Chemical on August 24, 2024 and sell it today you would earn a total of 2,554 from holding Eastman Chemical or generate 31.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastman Chemical vs. Space Communication
Performance |
| Timeline |
| Eastman Chemical |
| Space Communication |
Eastman Chemical and Space Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Space Communication
The main advantage of trading using opposite Eastman Chemical and Space Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Space Communication 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 Space Communication will offset losses from the drop in Space Communication's long position.| Eastman Chemical vs. Eshallgo Class A | Eastman Chemical vs. Amtech Systems | Eastman Chemical vs. Gold Fields Ltd | Eastman Chemical vs. Aegean Airlines SA |
| Space Communication vs. Playtika Holding Corp | Space Communication vs. Origin Materials | Space Communication vs. Canlan Ice Sports | Space Communication vs. Eastman Chemical |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |