Correlation Between Eastman Chemical and Meiwu Technology
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Meiwu Technology 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 Meiwu Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Chemical and Meiwu Technology Co, you can compare the effects of market volatilities on Eastman Chemical and Meiwu Technology 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 Meiwu Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Meiwu Technology.
Diversification Opportunities for Eastman Chemical and Meiwu Technology
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eastman and Meiwu is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Meiwu Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiwu Technology 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 Meiwu Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiwu Technology has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Meiwu Technology go up and down completely randomly.
Pair Corralation between Eastman Chemical and Meiwu Technology
Considering the 90-day investment horizon Eastman Chemical is expected to under-perform the Meiwu Technology. But the stock apears to be less risky and, when comparing its historical volatility, Eastman Chemical is 2.21 times less risky than Meiwu Technology. The stock trades about -0.01 of its potential returns per unit of risk. The Meiwu Technology Co is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 81.00 in Meiwu Technology Co on August 30, 2024 and sell it today you would earn a total of 15.00 from holding Meiwu Technology Co or generate 18.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Eastman Chemical vs. Meiwu Technology Co
Performance |
| Timeline |
| Eastman Chemical |
| Meiwu Technology |
Eastman Chemical and Meiwu Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Chemical and Meiwu Technology
The main advantage of trading using opposite Eastman Chemical and Meiwu Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Meiwu Technology 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 Meiwu Technology will offset losses from the drop in Meiwu Technology's long position.| Eastman Chemical vs. Olin Corporation | Eastman Chemical vs. Cabot | Eastman Chemical vs. Kronos Worldwide | Eastman Chemical vs. LyondellBasell Industries NV |
| Meiwu Technology vs. MOGU Inc | Meiwu Technology vs. iPower Inc | Meiwu Technology vs. Jeffs Brands | Meiwu Technology vs. Kidpik 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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