Correlation Between Eastman Chemical and SOUTHERN
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By analyzing existing cross correlation between Eastman Chemical and SOUTHERN CALIF EDISON, you can compare the effects of market volatilities on Eastman Chemical and SOUTHERN 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 SOUTHERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and SOUTHERN.
Diversification Opportunities for Eastman Chemical and SOUTHERN
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eastman and SOUTHERN is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and SOUTHERN CALIF EDISON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHERN CALIF EDISON 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 SOUTHERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHERN CALIF EDISON has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and SOUTHERN go up and down completely randomly.
Pair Corralation between Eastman Chemical and SOUTHERN
Considering the 90-day investment horizon Eastman Chemical is expected to generate 1.96 times more return on investment than SOUTHERN. However, Eastman Chemical is 1.96 times more volatile than SOUTHERN CALIF EDISON. It trades about 0.17 of its potential returns per unit of risk. SOUTHERN CALIF EDISON is currently generating about 0.08 per unit of risk. If you would invest 10,005 in Eastman Chemical on September 3, 2024 and sell it today you would earn a total of 467.00 from holding Eastman Chemical or generate 4.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Eastman Chemical vs. SOUTHERN CALIF EDISON
Performance |
| Timeline |
| Eastman Chemical |
| SOUTHERN CALIF EDISON |
Eastman Chemical and SOUTHERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and SOUTHERN
The main advantage of trading using opposite Eastman Chemical and SOUTHERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, SOUTHERN 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 SOUTHERN will offset losses from the drop in SOUTHERN's long position.| Eastman Chemical vs. SPACE | Eastman Chemical vs. Bayview Acquisition Corp | Eastman Chemical vs. T Rowe Price | Eastman Chemical vs. Ampleforth |
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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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