Correlation Between Eastman Chemical and Amyris

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

By analyzing existing cross correlation between Eastman Chemical and Amyris Inc, you can compare the effects of market volatilities on Eastman Chemical and Amyris 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 Amyris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Amyris.

Diversification Opportunities for Eastman Chemical and Amyris

-0.62

Correlation Coefficient

Eastman Chemical  Amyris

Excellent diversification

The 3 months correlation between Eastman and Amyris is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Amyris Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amyris Inc 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 are associated (or correlated) with Amyris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amyris Inc has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Amyris go up and down completely randomly.

Pair Corralation between Eastman Chemical and Amyris

If you would invest  101.00  in Amyris Inc on September 14, 2024 and sell it today you would earn a total of  0.00  from holding Amyris Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Eastman Chemical  vs.  Amyris Inc

Eastman Chemical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eastman Chemical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Eastman Chemical is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Amyris Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amyris Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Amyris is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Eastman Chemical and Amyris

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

The idea behind Eastman Chemical and Amyris Inc 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.