Correlation Between Mulberry Group and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Mulberry Group 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 Mulberry Group and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mulberry Group PLC and Eastman Chemical Co, you can compare the effects of market volatilities on Mulberry Group 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 Mulberry Group with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mulberry Group and Eastman Chemical.
Diversification Opportunities for Mulberry Group and Eastman Chemical
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mulberry and Eastman is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Mulberry Group PLC and Eastman Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Mulberry Group 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 Mulberry Group PLC 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 Mulberry Group i.e., Mulberry Group and Eastman Chemical go up and down completely randomly.
Pair Corralation between Mulberry Group and Eastman Chemical
Assuming the 90 days trading horizon Mulberry Group PLC is expected to under-perform the Eastman Chemical. In addition to that, Mulberry Group is 2.68 times more volatile than Eastman Chemical Co. It trades about -0.02 of its total potential returns per unit of risk. Eastman Chemical Co is currently generating about 0.05 per unit of volatility. If you would invest 9,681 in Eastman Chemical Co on September 3, 2024 and sell it today you would earn a total of 791.00 from holding Eastman Chemical Co or generate 8.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.09% |
| Values | Daily Returns |
Mulberry Group PLC vs. Eastman Chemical Co
Performance |
| Timeline |
| Mulberry Group PLC |
| Eastman Chemical |
Mulberry Group and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mulberry Group and Eastman Chemical
The main advantage of trading using opposite Mulberry Group and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mulberry Group 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.| Mulberry Group vs. Sabre Insurance Group | Mulberry Group vs. PureTech Health plc | Mulberry Group vs. Microchip Technology | Mulberry Group vs. Ashtead Technology Holdings |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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