Correlation Between IONQ and Eastman Kodak
Can any of the company-specific risk be diversified away by investing in both IONQ 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 IONQ and Eastman Kodak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IONQ Inc and Eastman Kodak Co, you can compare the effects of market volatilities on IONQ 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 IONQ with a short position of Eastman Kodak. Check out your portfolio center. Please also check ongoing floating volatility patterns of IONQ and Eastman Kodak.
Diversification Opportunities for IONQ and Eastman Kodak
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IONQ and Eastman is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding IONQ 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 IONQ 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 IONQ 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 IONQ i.e., IONQ and Eastman Kodak go up and down completely randomly.
Pair Corralation between IONQ and Eastman Kodak
Given the investment horizon of 90 days IONQ Inc is expected to generate 1.12 times more return on investment than Eastman Kodak. However, IONQ is 1.12 times more volatile than Eastman Kodak Co. It trades about 0.25 of its potential returns per unit of risk. Eastman Kodak Co is currently generating about 0.16 per unit of risk. If you would invest 2,301 in IONQ Inc on September 13, 2024 and sell it today you would earn a total of 996.00 from holding IONQ Inc or generate 43.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IONQ Inc vs. Eastman Kodak Co
Performance |
| Timeline |
| IONQ Inc |
| Eastman Kodak |
IONQ and Eastman Kodak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IONQ and Eastman Kodak
The main advantage of trading using opposite IONQ and Eastman Kodak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IONQ 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.The idea behind IONQ Inc and Eastman Kodak 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.| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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