Correlation Between Eastman Kodak and First Advantage
Can any of the company-specific risk be diversified away by investing in both Eastman Kodak and First Advantage 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 First Advantage 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 First Advantage Corp, you can compare the effects of market volatilities on Eastman Kodak and First Advantage 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 First Advantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Kodak and First Advantage.
Diversification Opportunities for Eastman Kodak and First Advantage
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eastman and First is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Kodak Co and First Advantage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Advantage Corp 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 First Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Advantage Corp has no effect on the direction of Eastman Kodak i.e., Eastman Kodak and First Advantage go up and down completely randomly.
Pair Corralation between Eastman Kodak and First Advantage
Given the investment horizon of 90 days Eastman Kodak Co is expected to generate 2.69 times more return on investment than First Advantage. However, Eastman Kodak is 2.69 times more volatile than First Advantage Corp. It trades about 0.17 of its potential returns per unit of risk. First Advantage Corp is currently generating about 0.23 per unit of risk. If you would invest 505.00 in Eastman Kodak Co on August 28, 2024 and sell it today you would earn a total of 120.00 from holding Eastman Kodak Co or generate 23.76% 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. First Advantage Corp
Performance |
| Timeline |
| Eastman Kodak |
| First Advantage Corp |
Eastman Kodak and First Advantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Kodak and First Advantage
The main advantage of trading using opposite Eastman Kodak and First Advantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Kodak position performs unexpectedly, First Advantage 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 First Advantage will offset losses from the drop in First Advantage's long position.| Eastman Kodak vs. SMX Public Limited | Eastman Kodak vs. System1 | Eastman Kodak vs. Lichen China Limited | Eastman Kodak vs. Team Inc |
| First Advantage vs. Discount Print USA | First Advantage vs. Cass Information Systems | First Advantage vs. Civeo Corp | First Advantage vs. Network 1 Technologies |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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