Correlation Between FAST RETAIL and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both FAST RETAIL and Eastman Chemical 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 FAST RETAIL and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FAST RETAIL ADR and Eastman Chemical, you can compare the effects of market volatilities on FAST RETAIL and Eastman Chemical 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 FAST RETAIL with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAST RETAIL and Eastman Chemical.
Diversification Opportunities for FAST RETAIL and Eastman Chemical
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between FAST and Eastman is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAIL ADR and Eastman Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and FAST RETAIL 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 FAST RETAIL ADR are associated (or correlated) with Eastman Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastman Chemical has no effect on the direction of FAST RETAIL i.e., FAST RETAIL and Eastman Chemical go up and down completely randomly.
Pair Corralation between FAST RETAIL and Eastman Chemical
Assuming the 90 days trading horizon FAST RETAIL ADR is expected to under-perform the Eastman Chemical. In addition to that, FAST RETAIL is 1.52 times more volatile than Eastman Chemical. It trades about -0.16 of its total potential returns per unit of risk. Eastman Chemical is currently generating about -0.15 per unit of volatility. If you would invest 9,588 in Eastman Chemical on December 4, 2024 and sell it today you would lose (300.00) from holding Eastman Chemical or give up 3.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FAST RETAIL ADR vs. Eastman Chemical
Performance |
| Timeline |
| FAST RETAIL ADR |
| Eastman Chemical |
FAST RETAIL and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAST RETAIL and Eastman Chemical
The main advantage of trading using opposite FAST RETAIL and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAST RETAIL position performs unexpectedly, Eastman Chemical 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 Eastman Chemical will offset losses from the drop in Eastman Chemical's long position.| FAST RETAIL vs. Wizz Air Holdings | FAST RETAIL vs. Delta Air Lines | FAST RETAIL vs. SOGECLAIR SA INH | FAST RETAIL vs. Universal Entertainment |
| Eastman Chemical vs. NORTHEAST UTILITIES | Eastman Chemical vs. NH HOTEL GROUP | Eastman Chemical vs. Xenia Hotels Resorts | Eastman Chemical vs. MIRAMAR HOTEL INV |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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