Correlation Between GEN Restaurant and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both GEN Restaurant 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 GEN Restaurant and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEN Restaurant Group, and Eastman Chemical, you can compare the effects of market volatilities on GEN Restaurant 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 GEN Restaurant with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEN Restaurant and Eastman Chemical.
Diversification Opportunities for GEN Restaurant and Eastman Chemical
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GEN and Eastman is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding GEN Restaurant Group, and Eastman Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and GEN Restaurant 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 GEN Restaurant Group, 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 GEN Restaurant i.e., GEN Restaurant and Eastman Chemical go up and down completely randomly.
Pair Corralation between GEN Restaurant and Eastman Chemical
Given the investment horizon of 90 days GEN Restaurant Group, is expected to generate 33.01 times more return on investment than Eastman Chemical. However, GEN Restaurant is 33.01 times more volatile than Eastman Chemical. It trades about 0.05 of its potential returns per unit of risk. Eastman Chemical is currently generating about 0.04 per unit of risk. If you would invest 0.00 in GEN Restaurant Group, on August 26, 2024 and sell it today you would earn a total of 777.00 from holding GEN Restaurant Group, or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 72.03% |
| Values | Daily Returns |
GEN Restaurant Group, vs. Eastman Chemical
Performance |
| Timeline |
| GEN Restaurant Group, |
| Eastman Chemical |
GEN Restaurant and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEN Restaurant and Eastman Chemical
The main advantage of trading using opposite GEN Restaurant and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEN Restaurant 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.| GEN Restaurant vs. Dream Finders Homes | GEN Restaurant vs. Boot Barn Holdings | GEN Restaurant vs. Victorias Secret Co | GEN Restaurant vs. Parker Hannifin |
| Eastman Chemical vs. Olin Corporation | Eastman Chemical vs. Cabot | Eastman Chemical vs. Kronos Worldwide | Eastman Chemical vs. LyondellBasell Industries NV |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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