Correlation Between Roebuck Food and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Roebuck Food 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 Roebuck Food and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roebuck Food Group and Eastman Chemical Co, you can compare the effects of market volatilities on Roebuck Food 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 Roebuck Food with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roebuck Food and Eastman Chemical.
Diversification Opportunities for Roebuck Food and Eastman Chemical
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Roebuck and Eastman is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Roebuck Food Group and Eastman Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Roebuck Food 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 Roebuck Food Group 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 Roebuck Food i.e., Roebuck Food and Eastman Chemical go up and down completely randomly.
Pair Corralation between Roebuck Food and Eastman Chemical
Assuming the 90 days trading horizon Roebuck Food Group is expected to under-perform the Eastman Chemical. In addition to that, Roebuck Food is 1.03 times more volatile than Eastman Chemical Co. It trades about -0.22 of its total potential returns per unit of risk. Eastman Chemical Co is currently generating about -0.16 per unit of volatility. If you would invest 10,056 in Eastman Chemical Co on December 4, 2024 and sell it today you would lose (392.00) from holding Eastman Chemical Co or give up 3.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Roebuck Food Group vs. Eastman Chemical Co
Performance |
| Timeline |
| Roebuck Food Group |
| Eastman Chemical |
Roebuck Food and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roebuck Food and Eastman Chemical
The main advantage of trading using opposite Roebuck Food and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roebuck Food 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.| Roebuck Food vs. Scandic Hotels Group | Roebuck Food vs. Creo Medical Group | Roebuck Food vs. British American Tobacco | Roebuck Food vs. Fresenius Medical Care |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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