Correlation Between Eastman Chemical and Roebuck Food

Can any of the company-specific risk be diversified away by investing in both Eastman Chemical and Roebuck Food 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 Roebuck Food 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 Roebuck Food Group, you can compare the effects of market volatilities on Eastman Chemical and Roebuck Food 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 Roebuck Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Chemical and Roebuck Food.

Diversification Opportunities for Eastman Chemical and Roebuck Food

-0.11

Correlation Coefficient

Eastman Chemical  Roebuck Food

Good diversification

The 3 months correlation between Eastman and Roebuck is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical Co and Roebuck Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roebuck Food Group 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 Roebuck Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roebuck Food Group has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Roebuck Food go up and down completely randomly.

Pair Corralation between Eastman Chemical and Roebuck Food

Assuming the 90 days trading horizon Eastman Chemical Co is expected to under-perform the Roebuck Food. In addition to that, Eastman Chemical is 4.88 times more volatile than Roebuck Food Group. It trades about -0.24 of its total potential returns per unit of risk. Roebuck Food Group is currently generating about 0.07 per unit of volatility. If you would invest  1,680  in Roebuck Food Group on October 8, 2024 and sell it today you would earn a total of  20.00  from holding Roebuck Food Group or generate 1.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Eastman Chemical Co  vs.  Roebuck Food Group

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Roebuck Food Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Roebuck Food Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Roebuck Food is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Eastman Chemical and Roebuck Food

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

The idea behind Eastman Chemical Co and Roebuck Food Group 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.