Correlation Between Valneva SE and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Valneva SE 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 Valneva SE and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valneva SE ADR and Eastman Chemical, you can compare the effects of market volatilities on Valneva SE 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 Valneva SE with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Eastman Chemical.
Diversification Opportunities for Valneva SE and Eastman Chemical
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Valneva and Eastman is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Eastman Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Valneva SE 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 Valneva SE ADR 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 Valneva SE i.e., Valneva SE and Eastman Chemical go up and down completely randomly.
Pair Corralation between Valneva SE and Eastman Chemical
Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the Eastman Chemical. In addition to that, Valneva SE is 2.42 times more volatile than Eastman Chemical. It trades about -0.11 of its total potential returns per unit of risk. Eastman Chemical is currently generating about 0.07 per unit of volatility. If you would invest 8,267 in Eastman Chemical on September 4, 2024 and sell it today you would earn a total of 2,027 from holding Eastman Chemical or generate 24.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valneva SE ADR vs. Eastman Chemical
Performance |
| Timeline |
| Valneva SE ADR |
| Eastman Chemical |
Valneva SE and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and Eastman Chemical
The main advantage of trading using opposite Valneva SE and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE 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.| Valneva SE vs. NuCana PLC | Valneva SE vs. Sage Therapeutic | Valneva SE vs. Sellas Life Sciences | Valneva SE vs. Third Harmonic Bio |
| Eastman Chemical vs. Olin Corporation | Eastman Chemical vs. Cabot | Eastman Chemical vs. Kronos Worldwide | Eastman Chemical vs. LyondellBasell Industries NV |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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