Correlation Between Eastman Kodak and Ameren Illinois
Can any of the company-specific risk be diversified away by investing in both Eastman Kodak and Ameren Illinois 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 Ameren Illinois 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 Ameren Illinois, you can compare the effects of market volatilities on Eastman Kodak and Ameren Illinois 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 Ameren Illinois. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Kodak and Ameren Illinois.
Diversification Opportunities for Eastman Kodak and Ameren Illinois
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eastman and Ameren is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Kodak Co and Ameren Illinois in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameren Illinois 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 Ameren Illinois. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameren Illinois has no effect on the direction of Eastman Kodak i.e., Eastman Kodak and Ameren Illinois go up and down completely randomly.
Pair Corralation between Eastman Kodak and Ameren Illinois
Given the investment horizon of 90 days Eastman Kodak Co is expected to generate 1.57 times more return on investment than Ameren Illinois. However, Eastman Kodak is 1.57 times more volatile than Ameren Illinois. It trades about 0.05 of its potential returns per unit of risk. Ameren Illinois is currently generating about 0.0 per unit of risk. If you would invest 363.00 in Eastman Kodak Co on September 3, 2024 and sell it today you would earn a total of 359.00 from holding Eastman Kodak Co or generate 98.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 78.18% |
| Values | Daily Returns |
Eastman Kodak Co vs. Ameren Illinois
Performance |
| Timeline |
| Eastman Kodak |
| Ameren Illinois |
Eastman Kodak and Ameren Illinois Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Kodak and Ameren Illinois
The main advantage of trading using opposite Eastman Kodak and Ameren Illinois positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Kodak position performs unexpectedly, Ameren Illinois 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 Ameren Illinois will offset losses from the drop in Ameren Illinois' long position.| Eastman Kodak vs. SMX Public Limited | Eastman Kodak vs. System1 | Eastman Kodak vs. Lichen China Limited | Eastman Kodak vs. Team Inc |
| Ameren Illinois vs. Tat Techno | Ameren Illinois vs. Apple Inc | Ameren Illinois vs. MGM Resorts International | Ameren Illinois vs. ATT 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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