Correlation Between Eastman Chemical and Harland John

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

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

Diversification Opportunities for Eastman Chemical and Harland John

0.0

Correlation Coefficient

Eastman Chemical  Harland John

Pay attention - limited upside

The 3 months correlation between Eastman and Harland is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Chemical and Harland John H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harland John H 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 Harland John. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harland John H has no effect on the direction of Eastman Chemical i.e., Eastman Chemical and Harland John go up and down completely randomly.

Pair Corralation between Eastman Chemical and Harland John

If you would invest (100.00) in Harland John H on September 30, 2024 and sell it today you would earn a total of  100.00  from holding Harland John H or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Eastman Chemical  vs.  Harland John H

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 unfluctuating performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Harland John H

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harland John H has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Harland John is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Eastman Chemical and Harland John

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

The idea behind Eastman Chemical and Harland John H 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.