Correlation Between Eastman Chemical and Tissue Regenix

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

Diversification Opportunities for Eastman Chemical and Tissue Regenix

0.05
  Correlation Coefficient

Significant diversification

The 3 months correlation between Eastman and Tissue is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical Co and Tissue Regenix Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tissue Regenix 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 Tissue Regenix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tissue Regenix Group has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Tissue Regenix go up and down completely randomly.

Pair Corralation between Eastman Chemical and Tissue Regenix

Assuming the 90 days trading horizon Eastman Chemical Co is expected to generate 1.08 times more return on investment than Tissue Regenix. However, Eastman Chemical is 1.08 times more volatile than Tissue Regenix Group. It trades about 0.12 of its potential returns per unit of risk. Tissue Regenix Group is currently generating about 0.11 per unit of risk. If you would invest  9,101  in Eastman Chemical Co on October 22, 2024 and sell it today you would earn a total of  262.00  from holding Eastman Chemical Co or generate 2.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy88.89%
ValuesDaily Returns

Eastman Chemical Co  vs.  Tissue Regenix Group

 Performance 
       Timeline  
Eastman Chemical 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 weak 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.
Tissue Regenix Group 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Tissue Regenix Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Tissue Regenix may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Eastman Chemical and Tissue Regenix Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Eastman Chemical and Tissue Regenix

The main advantage of trading using opposite Eastman Chemical and Tissue Regenix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Chemical position performs unexpectedly, Tissue Regenix 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 Tissue Regenix will offset losses from the drop in Tissue Regenix's long position.
The idea behind Eastman Chemical Co and Tissue Regenix 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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