Correlation Between Eastman Kodak and Universal Electronics
Can any of the company-specific risk be diversified away by investing in both Eastman Kodak and Universal Electronics 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 Universal Electronics 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 Universal Electronics, you can compare the effects of market volatilities on Eastman Kodak and Universal Electronics 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 Universal Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Kodak and Universal Electronics.
Diversification Opportunities for Eastman Kodak and Universal Electronics
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eastman and Universal is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Kodak Co and Universal Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Electronics 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 Universal Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Electronics has no effect on the direction of Eastman Kodak i.e., Eastman Kodak and Universal Electronics go up and down completely randomly.
Pair Corralation between Eastman Kodak and Universal Electronics
Given the investment horizon of 90 days Eastman Kodak Co is expected to generate 1.27 times more return on investment than Universal Electronics. However, Eastman Kodak is 1.27 times more volatile than Universal Electronics. It trades about 0.02 of its potential returns per unit of risk. Universal Electronics is currently generating about -0.04 per unit of risk. If you would invest 457.00 in Eastman Kodak Co on January 26, 2024 and sell it today you would earn a total of 1.00 from holding Eastman Kodak Co or generate 0.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastman Kodak Co vs. Universal Electronics
Performance |
| Timeline |
| Eastman Kodak |
| Universal Electronics |
Eastman Kodak and Universal Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Kodak and Universal Electronics
The main advantage of trading using opposite Eastman Kodak and Universal Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Kodak position performs unexpectedly, Universal Electronics 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 Universal Electronics will offset losses from the drop in Universal Electronics' long position.| Eastman Kodak vs. SMX Public Limited | Eastman Kodak vs. System1 | Eastman Kodak vs. Lichen China Limited | Eastman Kodak vs. Team Inc |
| Universal Electronics vs. LG Display Co | Universal Electronics vs. Turtle Beach Corp | Universal Electronics vs. Vuzix Corp Cmn | Universal Electronics vs. Sony 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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