Correlation Between Eastman Chemical and Suntory Beverage
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Suntory Beverage 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 Suntory Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Suntory Beverage Food, you can compare the effects of market volatilities on Eastman Chemical and Suntory Beverage 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 Suntory Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Suntory Beverage.
Diversification Opportunities for Eastman Chemical and Suntory Beverage
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eastman and Suntory is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Suntory Beverage Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suntory Beverage Food 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 Suntory Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suntory Beverage Food has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Suntory Beverage go up and down completely randomly.
Pair Corralation between Eastman Chemical and Suntory Beverage
Considering the 90-day investment horizon Eastman Chemical is expected to generate 1.04 times more return on investment than Suntory Beverage. However, Eastman Chemical is 1.04 times more volatile than Suntory Beverage Food. It trades about 0.13 of its potential returns per unit of risk. Suntory Beverage Food is currently generating about 0.04 per unit of risk. If you would invest 10,108 in Eastman Chemical on September 2, 2024 and sell it today you would earn a total of 364.00 from holding Eastman Chemical or generate 3.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastman Chemical vs. Suntory Beverage Food
Performance |
| Timeline |
| Eastman Chemical |
| Suntory Beverage Food |
Eastman Chemical and Suntory Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Suntory Beverage
The main advantage of trading using opposite Eastman Chemical and Suntory Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Suntory Beverage 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 Suntory Beverage will offset losses from the drop in Suntory Beverage'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 |
| Suntory Beverage vs. Barfresh Food Group | Suntory Beverage vs. Fbec Worldwide | Suntory Beverage vs. Flow Beverage Corp | Suntory Beverage vs. Eq Energy Drink |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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