Correlation Between 50249AAD5 and Eastman Chemical
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By analyzing existing cross correlation between LYB INTERNATIONAL FINANCE and Eastman Chemical, you can compare the effects of market volatilities on 50249AAD5 and Eastman Chemical 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 50249AAD5 with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of 50249AAD5 and Eastman Chemical.
Diversification Opportunities for 50249AAD5 and Eastman Chemical
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 50249AAD5 and Eastman is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding LYB INTERNATIONAL FINANCE and Eastman Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and 50249AAD5 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 LYB INTERNATIONAL FINANCE are associated (or correlated) with Eastman Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastman Chemical has no effect on the direction of 50249AAD5 i.e., 50249AAD5 and Eastman Chemical go up and down completely randomly.
Pair Corralation between 50249AAD5 and Eastman Chemical
Assuming the 90 days trading horizon LYB INTERNATIONAL FINANCE is expected to generate 1.85 times more return on investment than Eastman Chemical. However, 50249AAD5 is 1.85 times more volatile than Eastman Chemical. It trades about 0.12 of its potential returns per unit of risk. Eastman Chemical is currently generating about -0.55 per unit of risk. If you would invest 7,876 in LYB INTERNATIONAL FINANCE on September 24, 2024 and sell it today you would earn a total of 395.00 from holding LYB INTERNATIONAL FINANCE or generate 5.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
LYB INTERNATIONAL FINANCE vs. Eastman Chemical
Performance |
Timeline |
LYB INTERNATIONAL FINANCE |
Eastman Chemical |
50249AAD5 and Eastman Chemical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 50249AAD5 and Eastman Chemical
The main advantage of trading using opposite 50249AAD5 and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 50249AAD5 position performs unexpectedly, Eastman Chemical 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 Eastman Chemical will offset losses from the drop in Eastman Chemical's long position.50249AAD5 vs. Eastman Chemical | 50249AAD5 vs. Electronic Arts | 50249AAD5 vs. Ainsworth Game Technology | 50249AAD5 vs. NL Industries |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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