Correlation Between Xinhua Winshare and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Xinhua Winshare 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 Xinhua Winshare and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xinhua Winshare Publishing and Eastman Chemical, you can compare the effects of market volatilities on Xinhua Winshare 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 Xinhua Winshare with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinhua Winshare and Eastman Chemical.
Diversification Opportunities for Xinhua Winshare and Eastman Chemical
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Xinhua and Eastman is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and Eastman Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Xinhua Winshare 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 Xinhua Winshare Publishing 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 Xinhua Winshare i.e., Xinhua Winshare and Eastman Chemical go up and down completely randomly.
Pair Corralation between Xinhua Winshare and Eastman Chemical
Assuming the 90 days horizon Xinhua Winshare Publishing is expected to generate 3.2 times more return on investment than Eastman Chemical. However, Xinhua Winshare is 3.2 times more volatile than Eastman Chemical. It trades about 0.14 of its potential returns per unit of risk. Eastman Chemical is currently generating about 0.06 per unit of risk. If you would invest 30.00 in Xinhua Winshare Publishing on September 12, 2024 and sell it today you would earn a total of 93.00 from holding Xinhua Winshare Publishing or generate 310.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinhua Winshare Publishing vs. Eastman Chemical
Performance |
| Timeline |
| Xinhua Winshare Publ |
| Eastman Chemical |
Xinhua Winshare and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinhua Winshare and Eastman Chemical
The main advantage of trading using opposite Xinhua Winshare and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinhua Winshare 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.| Xinhua Winshare vs. Superior Plus Corp | Xinhua Winshare vs. SIVERS SEMICONDUCTORS AB | Xinhua Winshare vs. Norsk Hydro ASA | Xinhua Winshare vs. Reliance Steel Aluminum |
| Eastman Chemical vs. AIR LIQUIDE ADR | Eastman Chemical vs. Shin Etsu Chemical Co | Eastman Chemical vs. Ganfeng Lithium Co | Eastman Chemical vs. Superior Plus Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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