Correlation Between Eastman Chemical and SunLink Health
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and SunLink Health 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 SunLink Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and SunLink Health Systems, you can compare the effects of market volatilities on Eastman Chemical and SunLink Health 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 SunLink Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and SunLink Health.
Diversification Opportunities for Eastman Chemical and SunLink Health
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eastman and SunLink is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and SunLink Health Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunLink Health Systems 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 SunLink Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunLink Health Systems has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and SunLink Health go up and down completely randomly.
Pair Corralation between Eastman Chemical and SunLink Health
Considering the 90-day investment horizon Eastman Chemical is expected to generate 0.41 times more return on investment than SunLink Health. However, Eastman Chemical is 2.45 times less risky than SunLink Health. It trades about -0.01 of its potential returns per unit of risk. SunLink Health Systems is currently generating about -0.16 per unit of risk. If you would invest 10,484 in Eastman Chemical on August 30, 2024 and sell it today you would lose (61.00) from holding Eastman Chemical or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastman Chemical vs. SunLink Health Systems
Performance |
| Timeline |
| Eastman Chemical |
| SunLink Health Systems |
Eastman Chemical and SunLink Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and SunLink Health
The main advantage of trading using opposite Eastman Chemical and SunLink Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, SunLink Health 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 SunLink Health will offset losses from the drop in SunLink Health's long position.| Eastman Chemical vs. Olin Corporation | Eastman Chemical vs. Cabot | Eastman Chemical vs. Kronos Worldwide | Eastman Chemical vs. LyondellBasell Industries NV |
| SunLink Health vs. Humana Inc | SunLink Health vs. Cigna Corp | SunLink Health vs. Elevance Health | SunLink Health vs. Centene 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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