Correlation Between Warner Music and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Warner Music 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 Warner Music and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Warner Music Group and Eastman Chemical, you can compare the effects of market volatilities on Warner Music 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 Warner Music with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Warner Music and Eastman Chemical.
Diversification Opportunities for Warner Music and Eastman Chemical
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Warner and Eastman is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Warner Music Group and Eastman Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Warner Music 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 Warner Music Group 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 Warner Music i.e., Warner Music and Eastman Chemical go up and down completely randomly.
Pair Corralation between Warner Music and Eastman Chemical
If you would invest 27,540 in Eastman Chemical on October 25, 2024 and sell it today you would earn a total of 0.00 from holding Eastman Chemical or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Warner Music Group vs. Eastman Chemical
Performance |
| Timeline |
| Warner Music Group |
| Eastman Chemical |
Warner Music and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Warner Music and Eastman Chemical
The main advantage of trading using opposite Warner Music and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Warner Music 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.| Warner Music vs. Trane Technologies plc | Warner Music vs. The Trade Desk | Warner Music vs. L3Harris Technologies, | Warner Music vs. Cognizant Technology Solutions |
| Eastman Chemical vs. SVB Financial Group | Eastman Chemical vs. MAHLE Metal Leve | Eastman Chemical vs. Bank of America | Eastman Chemical vs. Discover Financial Services |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |