Correlation Between Eastman Kodak and CERo Therapeutics
Can any of the company-specific risk be diversified away by investing in both Eastman Kodak and CERo Therapeutics 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 CERo Therapeutics 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 CERo Therapeutics Holdings, you can compare the effects of market volatilities on Eastman Kodak and CERo Therapeutics 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 CERo Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Kodak and CERo Therapeutics.
Diversification Opportunities for Eastman Kodak and CERo Therapeutics
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eastman and CERo is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Kodak Co and CERo Therapeutics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CERo Therapeutics 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 CERo Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CERo Therapeutics has no effect on the direction of Eastman Kodak i.e., Eastman Kodak and CERo Therapeutics go up and down completely randomly.
Pair Corralation between Eastman Kodak and CERo Therapeutics
Given the investment horizon of 90 days Eastman Kodak is expected to generate 12.4 times less return on investment than CERo Therapeutics. But when comparing it to its historical volatility, Eastman Kodak Co is 7.61 times less risky than CERo Therapeutics. It trades about 0.06 of its potential returns per unit of risk. CERo Therapeutics Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 7.00 in CERo Therapeutics Holdings on September 5, 2024 and sell it today you would lose (5.60) from holding CERo Therapeutics Holdings or give up 80.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 30.3% |
| Values | Daily Returns |
Eastman Kodak Co vs. CERo Therapeutics Holdings
Performance |
| Timeline |
| Eastman Kodak |
| CERo Therapeutics |
Eastman Kodak and CERo Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Kodak and CERo Therapeutics
The main advantage of trading using opposite Eastman Kodak and CERo Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Kodak position performs unexpectedly, CERo Therapeutics 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 CERo Therapeutics will offset losses from the drop in CERo Therapeutics' long position.| Eastman Kodak vs. Rigetti Computing | Eastman Kodak vs. D Wave Quantum | Eastman Kodak vs. IONQ Inc | Eastman Kodak vs. Desktop Metal |
| CERo Therapeutics vs. Vincerx Pharma | CERo Therapeutics vs. Viracta Therapeutics | CERo Therapeutics vs. Dogwood Therapeutics, | CERo Therapeutics vs. Viking Therapeutics |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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