Correlation Between Eastman Chemical and Gedeon Richter
Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Gedeon Richter 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 Gedeon Richter 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 Gedeon Richter PLC, you can compare the effects of market volatilities on Eastman Chemical and Gedeon Richter 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 Gedeon Richter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Gedeon Richter.
Diversification Opportunities for Eastman Chemical and Gedeon Richter
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eastman and Gedeon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical Co and Gedeon Richter PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gedeon Richter PLC 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 Gedeon Richter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gedeon Richter PLC has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Gedeon Richter go up and down completely randomly.
Pair Corralation between Eastman Chemical and Gedeon Richter
If you would invest 504,000 in Gedeon Richter PLC on September 15, 2024 and sell it today you would earn a total of 0.00 from holding Gedeon Richter PLC or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 95.45% |
Values | Daily Returns |
Eastman Chemical Co vs. Gedeon Richter PLC
Performance |
Timeline |
Eastman Chemical |
Gedeon Richter PLC |
Eastman Chemical and Gedeon Richter Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eastman Chemical and Gedeon Richter
The main advantage of trading using opposite Eastman Chemical and Gedeon Richter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Gedeon Richter 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 Gedeon Richter will offset losses from the drop in Gedeon Richter's long position.Eastman Chemical vs. Samsung Electronics Co | Eastman Chemical vs. Samsung Electronics Co | Eastman Chemical vs. Hyundai Motor | Eastman Chemical vs. Reliance Industries Ltd |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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