Correlation Between Eastman Kodak and WB Burgers
Can any of the company-specific risk be diversified away by investing in both Eastman Kodak and WB Burgers 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 WB Burgers 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 WB Burgers Asia, you can compare the effects of market volatilities on Eastman Kodak and WB Burgers 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 WB Burgers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Kodak and WB Burgers.
Diversification Opportunities for Eastman Kodak and WB Burgers
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eastman and WBBA is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Kodak Co and WB Burgers Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WB Burgers Asia 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 WB Burgers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WB Burgers Asia has no effect on the direction of Eastman Kodak i.e., Eastman Kodak and WB Burgers go up and down completely randomly.
Pair Corralation between Eastman Kodak and WB Burgers
Given the investment horizon of 90 days Eastman Kodak is expected to generate 67.54 times less return on investment than WB Burgers. But when comparing it to its historical volatility, Eastman Kodak Co is 30.44 times less risky than WB Burgers. It trades about 0.06 of its potential returns per unit of risk. WB Burgers Asia is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 350.00 in WB Burgers Asia on October 21, 2024 and sell it today you would lose (310.00) from holding WB Burgers Asia or give up 88.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 68.35% |
| Values | Daily Returns |
Eastman Kodak Co vs. WB Burgers Asia
Performance |
| Timeline |
| Eastman Kodak |
| WB Burgers Asia |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Eastman Kodak and WB Burgers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastman Kodak and WB Burgers
The main advantage of trading using opposite Eastman Kodak and WB Burgers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Kodak position performs unexpectedly, WB Burgers 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 WB Burgers will offset losses from the drop in WB Burgers' 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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