Correlation Between Eastman Chemical and Science In

Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Science In 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 Eastman Chemical and Science In into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eastman Chemical Co and Science in Sport, you can compare the effects of market volatilities on Eastman Chemical and Science In 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 Eastman Chemical with a short position of Science In. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Science In.

Diversification Opportunities for Eastman Chemical and Science In

-0.74

Correlation Coefficient

Eastman Chemical  Science In

Pay attention - limited upside

The 3 months correlation between Eastman and Science is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical Co and Science in Sport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Science in Sport and Eastman Chemical 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 Eastman Chemical Co are associated (or correlated) with Science In. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Science in Sport has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Science In go up and down completely randomly.

Pair Corralation between Eastman Chemical and Science In

Assuming the 90 days trading horizon Eastman Chemical Co is expected to under-perform the Science In. In addition to that, Eastman Chemical is 1.16 times more volatile than Science in Sport. It trades about -0.24 of its total potential returns per unit of risk. Science in Sport is currently generating about -0.07 per unit of volatility. If you would invest  2,650  in Science in Sport on September 18, 2024 and sell it today you would lose (50.00) from holding Science in Sport or give up 1.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	90.91%
Values	Daily Returns

Eastman Chemical Co  vs.  Science in Sport

Eastman Chemical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eastman Chemical Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Science in Sport

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Science in Sport are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Science In may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Eastman Chemical and Science In

The main advantage of trading using opposite Eastman Chemical and Science In positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Science In 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 Science In will offset losses from the drop in Science In's long position.

The idea behind Eastman Chemical Co and Science in Sport pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.