Correlation Between Eastman Kodak and NioCorp Developments
Can any of the company-specific risk be diversified away by investing in both Eastman Kodak and NioCorp Developments 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 NioCorp Developments 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 NioCorp Developments Ltd, you can compare the effects of market volatilities on Eastman Kodak and NioCorp Developments 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 NioCorp Developments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Kodak and NioCorp Developments.
Diversification Opportunities for Eastman Kodak and NioCorp Developments
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eastman and NioCorp is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Kodak Co and NioCorp Developments Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NioCorp Developments 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 NioCorp Developments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NioCorp Developments has no effect on the direction of Eastman Kodak i.e., Eastman Kodak and NioCorp Developments go up and down completely randomly.
Pair Corralation between Eastman Kodak and NioCorp Developments
Given the investment horizon of 90 days Eastman Kodak Co is expected to generate 0.95 times more return on investment than NioCorp Developments. However, Eastman Kodak Co is 1.06 times less risky than NioCorp Developments. It trades about 0.08 of its potential returns per unit of risk. NioCorp Developments Ltd is currently generating about -0.04 per unit of risk. If you would invest 374.00 in Eastman Kodak Co on September 2, 2024 and sell it today you would earn a total of 351.00 from holding Eastman Kodak Co or generate 93.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastman Kodak Co vs. NioCorp Developments Ltd
Performance |
| Timeline |
| Eastman Kodak |
| NioCorp Developments |
Eastman Kodak and NioCorp Developments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Kodak and NioCorp Developments
The main advantage of trading using opposite Eastman Kodak and NioCorp Developments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Kodak position performs unexpectedly, NioCorp Developments 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 NioCorp Developments will offset losses from the drop in NioCorp Developments' long position.| Eastman Kodak vs. SMX Public Limited | Eastman Kodak vs. System1 | Eastman Kodak vs. Lichen China Limited | Eastman Kodak vs. Team Inc |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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