Correlation Between Eastman Chemical and USA Recycling
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and USA Recycling 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 USA Recycling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and USA Recycling Industries, you can compare the effects of market volatilities on Eastman Chemical and USA Recycling 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 USA Recycling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and USA Recycling.
Diversification Opportunities for Eastman Chemical and USA Recycling
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eastman and USA is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and USA Recycling Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USA Recycling Industries 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 USA Recycling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USA Recycling Industries has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and USA Recycling go up and down completely randomly.
Pair Corralation between Eastman Chemical and USA Recycling
If you would invest 9,267 in Eastman Chemical on November 29, 2024 and sell it today you would earn a total of 552.00 from holding Eastman Chemical or generate 5.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Eastman Chemical vs. USA Recycling Industries
Performance |
| Timeline |
| Eastman Chemical |
| USA Recycling Industries |
Eastman Chemical and USA Recycling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and USA Recycling
The main advantage of trading using opposite Eastman Chemical and USA Recycling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, USA Recycling 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 USA Recycling will offset losses from the drop in USA Recycling'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 |
| USA Recycling vs. Perseus Mining Limited | USA Recycling vs. Reyna Silver Corp | USA Recycling vs. JBG SMITH Properties | USA Recycling vs. Southern Home Medicl |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |