Correlation Between Orient Telecoms and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Orient Telecoms 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 Orient Telecoms and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orient Telecoms and Eastman Chemical Co, you can compare the effects of market volatilities on Orient Telecoms 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 Orient Telecoms with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orient Telecoms and Eastman Chemical.
Diversification Opportunities for Orient Telecoms and Eastman Chemical
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Orient and Eastman is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Orient Telecoms and Eastman Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Orient Telecoms 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 Orient Telecoms 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 Orient Telecoms i.e., Orient Telecoms and Eastman Chemical go up and down completely randomly.
Pair Corralation between Orient Telecoms and Eastman Chemical
If you would invest 8,897 in Eastman Chemical Co on November 7, 2024 and sell it today you would earn a total of 1,013 from holding Eastman Chemical Co or generate 11.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 82.61% |
| Values | Daily Returns |
Orient Telecoms vs. Eastman Chemical Co
Performance |
| Timeline |
| Orient Telecoms |
| Eastman Chemical |
Orient Telecoms and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orient Telecoms and Eastman Chemical
The main advantage of trading using opposite Orient Telecoms and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orient Telecoms 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.| Orient Telecoms vs. mobilezone holding AG | Orient Telecoms vs. Verizon Communications | Orient Telecoms vs. Geely Automobile Holdings | Orient Telecoms vs. Foresight Environmental Infrastructure |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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