Correlation Between Eastman Kodak and Sun Hung

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Can any of the company-specific risk be diversified away by investing in both Eastman Kodak and Sun Hung 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 Sun Hung 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 Sun Hung Kai, you can compare the effects of market volatilities on Eastman Kodak and Sun Hung 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 Sun Hung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Kodak and Sun Hung.

Diversification Opportunities for Eastman Kodak and Sun Hung

-0.65
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Eastman and Sun is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Kodak Co and Sun Hung Kai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Hung Kai 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 Sun Hung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Hung Kai has no effect on the direction of Eastman Kodak i.e., Eastman Kodak and Sun Hung go up and down completely randomly.

Pair Corralation between Eastman Kodak and Sun Hung

Given the investment horizon of 90 days Eastman Kodak Co is expected to generate 2.75 times more return on investment than Sun Hung. However, Eastman Kodak is 2.75 times more volatile than Sun Hung Kai. It trades about 0.06 of its potential returns per unit of risk. Sun Hung Kai is currently generating about -0.04 per unit of risk. If you would invest  355.00  in Eastman Kodak Co on November 2, 2024 and sell it today you would earn a total of  391.00  from holding Eastman Kodak Co or generate 110.14% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Eastman Kodak Co  vs.  Sun Hung Kai

 Performance 
       Timeline  
Eastman Kodak 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Eastman Kodak Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating fundamental indicators, Eastman Kodak disclosed solid returns over the last few months and may actually be approaching a breakup point.
Sun Hung Kai 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Sun Hung Kai has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Eastman Kodak and Sun Hung Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Eastman Kodak and Sun Hung

The main advantage of trading using opposite Eastman Kodak and Sun Hung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Kodak position performs unexpectedly, Sun Hung 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 Sun Hung will offset losses from the drop in Sun Hung's long position.
The idea behind Eastman Kodak Co and Sun Hung Kai pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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