Correlation Between Suntory Beverage and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Suntory Beverage 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 Suntory Beverage and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suntory Beverage Food and Eastman Chemical, you can compare the effects of market volatilities on Suntory Beverage 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 Suntory Beverage with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntory Beverage and Eastman Chemical.
Diversification Opportunities for Suntory Beverage and Eastman Chemical
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Suntory and Eastman is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Suntory Beverage Food and Eastman Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Suntory Beverage 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 Suntory Beverage Food 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 Suntory Beverage i.e., Suntory Beverage and Eastman Chemical go up and down completely randomly.
Pair Corralation between Suntory Beverage and Eastman Chemical
Assuming the 90 days horizon Suntory Beverage is expected to generate 3.29 times less return on investment than Eastman Chemical. But when comparing it to its historical volatility, Suntory Beverage Food is 1.04 times less risky than Eastman Chemical. It trades about 0.04 of its potential returns per unit of risk. Eastman Chemical is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 10,108 in Eastman Chemical on September 2, 2024 and sell it today you would earn a total of 364.00 from holding Eastman Chemical or generate 3.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suntory Beverage Food vs. Eastman Chemical
Performance |
| Timeline |
| Suntory Beverage Food |
| Eastman Chemical |
Suntory Beverage and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suntory Beverage and Eastman Chemical
The main advantage of trading using opposite Suntory Beverage and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suntory Beverage 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.| Suntory Beverage vs. Barfresh Food Group | Suntory Beverage vs. Fbec Worldwide | Suntory Beverage vs. Flow Beverage Corp | Suntory Beverage vs. Eq Energy Drink |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |