Correlation Between Eastman Chemical and Lord Global

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

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

Diversification Opportunities for Eastman Chemical and Lord Global

0.0

Correlation Coefficient

Eastman Chemical  Lord Global

Pay attention - limited upside

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

Pair Corralation between Eastman Chemical and Lord Global

If you would invest  9,846  in Eastman Chemical on September 4, 2024 and sell it today you would earn a total of  581.00  from holding Eastman Chemical or generate 5.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Eastman Chemical  vs.  Lord Global Corp

Eastman Chemical

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eastman Chemical are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Eastman Chemical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Lord Global Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lord Global Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Lord Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Eastman Chemical and Lord Global

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

The idea behind Eastman Chemical and Lord Global Corp 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.