Correlation Between Canadian General and Eastman Chemical

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

By analyzing existing cross correlation between Canadian General Investments and Eastman Chemical Co, you can compare the effects of market volatilities on Canadian General 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 Canadian General with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and Eastman Chemical.

Diversification Opportunities for Canadian General and Eastman Chemical

0.38

Correlation Coefficient

Canadian General  Eastman Chemical

Weak diversification

The 3 months correlation between Canadian and Eastman is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and Eastman Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Canadian General 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 Canadian General Investments 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 Canadian General i.e., Canadian General and Eastman Chemical go up and down completely randomly.

Pair Corralation between Canadian General and Eastman Chemical

Assuming the 90 days trading horizon Canadian General Investments is expected to generate 0.52 times more return on investment than Eastman Chemical. However, Canadian General Investments is 1.93 times less risky than Eastman Chemical. It trades about 0.3 of its potential returns per unit of risk. Eastman Chemical Co is currently generating about 0.0 per unit of risk. If you would invest  177,749  in Canadian General Investments on April 24, 2025 and sell it today you would earn a total of  41,751  from holding Canadian General Investments or generate 23.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.32%
Values	Daily Returns

Canadian General Investments  vs.  Eastman Chemical Co

Canadian General Inv

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian General Investments are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Canadian General exhibited solid returns over the last few months and may actually be approaching a breakup point.

Eastman Chemical

Risk-Adjusted Performance

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 comparatively stable basic indicators, Eastman Chemical is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Canadian General and Eastman Chemical

The main advantage of trading using opposite Canadian General and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General 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.

The idea behind Canadian General Investments and Eastman Chemical Co 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..