Correlation Between Tradegate and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Tradegate 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 Tradegate and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tradegate AG Wertpapierhandelsbank and Eastman Chemical, you can compare the effects of market volatilities on Tradegate 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 Tradegate with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradegate and Eastman Chemical.
Diversification Opportunities for Tradegate and Eastman Chemical
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tradegate and Eastman is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Tradegate AG Wertpapierhandels and Eastman Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Tradegate 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 Tradegate AG Wertpapierhandelsbank 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 Tradegate i.e., Tradegate and Eastman Chemical go up and down completely randomly.
Pair Corralation between Tradegate and Eastman Chemical
Assuming the 90 days horizon Tradegate is expected to generate 163.57 times less return on investment than Eastman Chemical. But when comparing it to its historical volatility, Tradegate AG Wertpapierhandelsbank is 3.19 times less risky than Eastman Chemical. It trades about 0.0 of its potential returns per unit of risk. Eastman Chemical is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 8,726 in Eastman Chemical on October 20, 2024 and sell it today you would earn a total of 170.00 from holding Eastman Chemical or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tradegate AG Wertpapierhandels vs. Eastman Chemical
Performance |
| Timeline |
| Tradegate AG Wertpap |
| Eastman Chemical |
Tradegate and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tradegate and Eastman Chemical
The main advantage of trading using opposite Tradegate and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradegate 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.| Tradegate vs. BII Railway Transportation | Tradegate vs. Sumitomo Rubber Industries | Tradegate vs. NEWELL RUBBERMAID | Tradegate vs. Broadcom |
| Eastman Chemical vs. Coffee Holding Co | Eastman Chemical vs. Xenia Hotels Resorts | Eastman Chemical vs. Pure Storage | Eastman Chemical vs. InterContinental Hotels 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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