Correlation Between GoPro and Eastman Kodak
Can any of the company-specific risk be diversified away by investing in both GoPro and Eastman Kodak 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 GoPro and Eastman Kodak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoPro Inc and Eastman Kodak Co, you can compare the effects of market volatilities on GoPro and Eastman Kodak 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 GoPro with a short position of Eastman Kodak. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoPro and Eastman Kodak.
Diversification Opportunities for GoPro and Eastman Kodak
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GoPro and Eastman is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding GoPro Inc and Eastman Kodak Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Kodak and GoPro 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 GoPro Inc are associated (or correlated) with Eastman Kodak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastman Kodak has no effect on the direction of GoPro i.e., GoPro and Eastman Kodak go up and down completely randomly.
Pair Corralation between GoPro and Eastman Kodak
Given the investment horizon of 90 days GoPro Inc is expected to under-perform the Eastman Kodak. But the stock apears to be less risky and, when comparing its historical volatility, GoPro Inc is 1.46 times less risky than Eastman Kodak. The stock trades about -0.1 of its potential returns per unit of risk. The Eastman Kodak Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 486.00 in Eastman Kodak Co on January 19, 2024 and sell it today you would lose (25.00) from holding Eastman Kodak Co or give up 5.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GoPro Inc vs. Eastman Kodak Co
Performance |
| Timeline |
| GoPro Inc |
| Eastman Kodak |
GoPro and Eastman Kodak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoPro and Eastman Kodak
The main advantage of trading using opposite GoPro and Eastman Kodak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoPro position performs unexpectedly, Eastman Kodak 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 Kodak will offset losses from the drop in Eastman Kodak's long position.| GoPro vs. Sony Group Corp | GoPro vs. LG Display Co | GoPro vs. Vizio Holding Corp | GoPro vs. Universal Electronics |
| Eastman Kodak vs. SMX Public Limited | Eastman Kodak vs. System1 | Eastman Kodak vs. Lichen China Limited | Eastman Kodak vs. Team Inc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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