Correlation Between Porvair Plc and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Porvair Plc 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 Porvair Plc and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Porvair plc and Eastman Chemical Co, you can compare the effects of market volatilities on Porvair Plc 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 Porvair Plc with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Porvair Plc and Eastman Chemical.
Diversification Opportunities for Porvair Plc and Eastman Chemical
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Porvair and Eastman is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Porvair 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 Porvair Plc 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 Porvair 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 Porvair Plc i.e., Porvair Plc and Eastman Chemical go up and down completely randomly.
Pair Corralation between Porvair Plc and Eastman Chemical
Assuming the 90 days trading horizon Porvair plc is expected to generate 0.79 times more return on investment than Eastman Chemical. However, Porvair plc is 1.26 times less risky than Eastman Chemical. It trades about 0.15 of its potential returns per unit of risk. Eastman Chemical Co is currently generating about -0.03 per unit of risk. If you would invest 65,800 in Porvair plc on September 13, 2024 and sell it today you would earn a total of 2,200 from holding Porvair plc or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Porvair plc vs. Eastman Chemical Co
Performance |
| Timeline |
| Porvair plc |
| Eastman Chemical |
Porvair Plc and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Porvair Plc and Eastman Chemical
The main advantage of trading using opposite Porvair Plc and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Porvair Plc 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.| Porvair Plc vs. Spirent Communications plc | Porvair Plc vs. MTI Wireless Edge | Porvair Plc vs. Molson Coors Beverage | Porvair Plc vs. Advanced Medical Solutions |
| Eastman Chemical vs. Ebro Foods | Eastman Chemical vs. Impax Environmental Markets | Eastman Chemical vs. Grieg Seafood | Eastman Chemical vs. Roebuck Food Group |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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