Correlation Between Helmerich and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Helmerich 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 Helmerich and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Helmerich and Payne and Eastman Chemical, you can compare the effects of market volatilities on Helmerich 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 Helmerich with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helmerich and Eastman Chemical.
Diversification Opportunities for Helmerich and Eastman Chemical
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Helmerich and Eastman is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Helmerich and Payne and Eastman Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Helmerich 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 Helmerich and Payne 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 Helmerich i.e., Helmerich and Eastman Chemical go up and down completely randomly.
Pair Corralation between Helmerich and Eastman Chemical
Allowing for the 90-day total investment horizon Helmerich and Payne is expected to under-perform the Eastman Chemical. In addition to that, Helmerich is 2.22 times more volatile than Eastman Chemical. It trades about -0.21 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 9,341 in Eastman Chemical on November 28, 2024 and sell it today you would earn a total of 552.00 from holding Eastman Chemical or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Helmerich and Payne vs. Eastman Chemical
Performance |
| Timeline |
| Helmerich and Payne |
| Eastman Chemical |
Helmerich and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Helmerich and Eastman Chemical
The main advantage of trading using opposite Helmerich and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helmerich 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.| Helmerich vs. Nabors Industries | Helmerich vs. Precision Drilling | Helmerich vs. Seadrill Limited | Helmerich vs. Patterson UTI Energy |
| Eastman Chemical vs. Air Products and | Eastman Chemical vs. International Flavors Fragrances | Eastman Chemical vs. Sherwin Williams Co | Eastman Chemical vs. PPG Industries |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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