Correlation Between Tower One and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Tower One 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 Tower One and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tower One Wireless and Eastman Chemical, you can compare the effects of market volatilities on Tower One 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 Tower One with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tower One and Eastman Chemical.
Diversification Opportunities for Tower One and Eastman Chemical
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tower and Eastman is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tower One Wireless and Eastman Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Tower One 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 Tower One Wireless 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 Tower One i.e., Tower One and Eastman Chemical go up and down completely randomly.
Pair Corralation between Tower One and Eastman Chemical
Assuming the 90 days horizon Tower One Wireless is expected to under-perform the Eastman Chemical. In addition to that, Tower One is 8.99 times more volatile than Eastman Chemical. It trades about -0.13 of its total potential returns per unit of risk. Eastman Chemical is currently generating about 0.01 per unit of volatility. If you would invest 9,884 in Eastman Chemical on September 12, 2024 and sell it today you would earn a total of 33.00 from holding Eastman Chemical or generate 0.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 96.88% |
| Values | Daily Returns |
Tower One Wireless vs. Eastman Chemical
Performance |
| Timeline |
| Tower One Wireless |
| Eastman Chemical |
Tower One and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tower One and Eastman Chemical
The main advantage of trading using opposite Tower One and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tower One 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.| Tower One vs. Access Power Co | Tower One vs. Nw Tech Capital | Tower One vs. Radcom | Tower One vs. FingerMotion |
| Eastman Chemical vs. Griffon | Eastman Chemical vs. Merck Company | Eastman Chemical vs. Brinker International | Eastman Chemical vs. Alcoa 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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