Correlation Between Advanced Medical and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Advanced Medical and Eastman Chemical 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 Advanced Medical and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Medical Solutions and Eastman Chemical, you can compare the effects of market volatilities on Advanced Medical 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 Advanced Medical with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Medical and Eastman Chemical.
Diversification Opportunities for Advanced Medical and Eastman Chemical
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Advanced and Eastman is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Medical Solutions and Eastman Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Advanced Medical 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 Advanced Medical Solutions 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 Advanced Medical i.e., Advanced Medical and Eastman Chemical go up and down completely randomly.
Pair Corralation between Advanced Medical and Eastman Chemical
Assuming the 90 days trading horizon Advanced Medical Solutions is expected to generate 1.01 times more return on investment than Eastman Chemical. However, Advanced Medical is 1.01 times more volatile than Eastman Chemical. It trades about 0.01 of its potential returns per unit of risk. Eastman Chemical is currently generating about -0.02 per unit of risk. If you would invest 237.00 in Advanced Medical Solutions on September 11, 2025 and sell it today you would earn a total of 1.00 from holding Advanced Medical Solutions or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Advanced Medical Solutions vs. Eastman Chemical
Performance |
| Timeline |
| Advanced Medical Sol |
| Eastman Chemical |
Advanced Medical and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Medical and Eastman Chemical
The main advantage of trading using opposite Advanced Medical and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Medical 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.| Advanced Medical vs. STORAGEVAULT CANADA INC | Advanced Medical vs. PUBLIC STORAGE PRFO | Advanced Medical vs. Alliance Data Systems | Advanced Medical vs. Datadog |
| Eastman Chemical vs. Merit Medical Systems | Eastman Chemical vs. ONWARD MEDICAL BV | Eastman Chemical vs. IMAGIN MEDICAL INC | Eastman Chemical vs. BURLINGTON STORES |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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