Correlation Between Eastman Kodak and Canon
Can any of the company-specific risk be diversified away by investing in both Eastman Kodak and Canon 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 Canon 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 Canon Inc, you can compare the effects of market volatilities on Eastman Kodak and Canon 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 Canon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Kodak and Canon.
Diversification Opportunities for Eastman Kodak and Canon
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eastman and Canon is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Kodak Co and Canon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canon 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 Canon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canon Inc has no effect on the direction of Eastman Kodak i.e., Eastman Kodak and Canon go up and down completely randomly.
Pair Corralation between Eastman Kodak and Canon
Given the investment horizon of 90 days Eastman Kodak Co is expected to generate 2.14 times more return on investment than Canon. However, Eastman Kodak is 2.14 times more volatile than Canon Inc. It trades about 0.11 of its potential returns per unit of risk. Canon Inc is currently generating about -0.04 per unit of risk. If you would invest 685.00 in Eastman Kodak Co on October 21, 2024 and sell it today you would earn a total of 43.00 from holding Eastman Kodak Co or generate 6.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastman Kodak Co vs. Canon Inc
Performance |
| Timeline |
| Eastman Kodak |
| Canon Inc |
Eastman Kodak and Canon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Kodak and Canon
The main advantage of trading using opposite Eastman Kodak and Canon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Kodak position performs unexpectedly, Canon 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 Canon will offset losses from the drop in Canon's long position.| Eastman Kodak vs. Canon Inc | Eastman Kodak vs. Artificial Intelligence Technology | Eastman Kodak vs. Quantum Computing | Eastman Kodak vs. Ageagle Aerial Systems |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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