Correlation Between Eastman Kodak and GoPro
Can any of the company-specific risk be diversified away by investing in both Eastman Kodak and GoPro 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 Kodak and GoPro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastman Kodak Co and GoPro Inc, you can compare the effects of market volatilities on Eastman Kodak and GoPro 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 Kodak with a short position of GoPro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Kodak and GoPro.
Diversification Opportunities for Eastman Kodak and GoPro
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eastman and GoPro is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Kodak Co and GoPro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoPro Inc and Eastman Kodak 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 Kodak Co are associated (or correlated) with GoPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoPro Inc has no effect on the direction of Eastman Kodak i.e., Eastman Kodak and GoPro go up and down completely randomly.
Pair Corralation between Eastman Kodak and GoPro
Given the investment horizon of 90 days Eastman Kodak Co is expected to generate 1.44 times more return on investment than GoPro. However, Eastman Kodak is 1.44 times more volatile than GoPro Inc. It trades about -0.06 of its potential returns per unit of risk. GoPro Inc is currently generating about -0.67 per unit of risk. If you would invest 483.00 in Eastman Kodak Co on January 20, 2024 and sell it today you would lose (22.00) from holding Eastman Kodak Co or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastman Kodak Co vs. GoPro Inc
Performance |
| Timeline |
| Eastman Kodak |
| GoPro Inc |
Eastman Kodak and GoPro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Kodak and GoPro
The main advantage of trading using opposite Eastman Kodak and GoPro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Kodak position performs unexpectedly, GoPro 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 GoPro will offset losses from the drop in GoPro's long position.| Eastman Kodak vs. LG Display Co | Eastman Kodak vs. Sony Corp | Eastman Kodak vs. Sonos Inc | Eastman Kodak vs. Vizio Holding Corp |
| GoPro vs. LG Display Co | GoPro vs. The Singing Machine | GoPro vs. Wearable Devices | GoPro vs. Zepp Health Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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