Correlation Between Eastman Kodak and Sony

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Can any of the company-specific risk be diversified away by investing in both Eastman Kodak and Sony 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 Sony 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 Sony Group, you can compare the effects of market volatilities on Eastman Kodak and Sony 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 Sony. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Kodak and Sony.

Diversification Opportunities for Eastman Kodak and Sony

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Eastman and Sony is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Kodak Co and Sony Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Group 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 Sony. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sony Group has no effect on the direction of Eastman Kodak i.e., Eastman Kodak and Sony go up and down completely randomly.

Pair Corralation between Eastman Kodak and Sony

If you would invest  390.00  in Eastman Kodak Co on December 29, 2023 and sell it today you would earn a total of  105.00  from holding Eastman Kodak Co or generate 26.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Eastman Kodak Co  vs.  Sony Group

 Performance 
       Timeline  
Eastman Kodak 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Eastman Kodak Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal fundamental indicators, Eastman Kodak disclosed solid returns over the last few months and may actually be approaching a breakup point.
Sony Group 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Sony Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Sony is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Eastman Kodak and Sony Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Eastman Kodak and Sony

The main advantage of trading using opposite Eastman Kodak and Sony positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Kodak position performs unexpectedly, Sony 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 Sony will offset losses from the drop in Sony's long position.
The idea behind Eastman Kodak Co and Sony Group 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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