Correlation Between General Shopping and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both General Shopping 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 General Shopping and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Shopping e and Eastman Chemical, you can compare the effects of market volatilities on General Shopping 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 General Shopping with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Shopping and Eastman Chemical.
Diversification Opportunities for General Shopping and Eastman Chemical
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between General and Eastman is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding General Shopping e and Eastman Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and General Shopping 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 General Shopping e 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 General Shopping i.e., General Shopping and Eastman Chemical go up and down completely randomly.
Pair Corralation between General Shopping and Eastman Chemical
If you would invest 27,365 in Eastman Chemical on October 12, 2024 and sell it today you would earn a total of 175.00 from holding Eastman Chemical or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Shopping e vs. Eastman Chemical
Performance |
| Timeline |
| General Shopping e |
| Eastman Chemical |
General Shopping and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Shopping and Eastman Chemical
The main advantage of trading using opposite General Shopping and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Shopping 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.| General Shopping vs. Tecnisa SA | General Shopping vs. Marcopolo SA | General Shopping vs. T4F Entretenimento SA | General Shopping vs. Centro de Imagem |
| Eastman Chemical vs. JB Hunt Transport | Eastman Chemical vs. Micron Technology | Eastman Chemical vs. Cognizant Technology Solutions | Eastman Chemical vs. DENTSPLY SIRONA |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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