Correlation Between NioCorp Developments and Eastman Kodak
Can any of the company-specific risk be diversified away by investing in both NioCorp Developments and Eastman Kodak 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 NioCorp Developments and Eastman Kodak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NioCorp Developments Ltd and Eastman Kodak Co, you can compare the effects of market volatilities on NioCorp Developments and Eastman Kodak 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 NioCorp Developments with a short position of Eastman Kodak. Check out your portfolio center. Please also check ongoing floating volatility patterns of NioCorp Developments and Eastman Kodak.
Diversification Opportunities for NioCorp Developments and Eastman Kodak
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NioCorp and Eastman is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding NioCorp Developments Ltd and Eastman Kodak Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Kodak and NioCorp Developments 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 NioCorp Developments Ltd are associated (or correlated) with Eastman Kodak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastman Kodak has no effect on the direction of NioCorp Developments i.e., NioCorp Developments and Eastman Kodak go up and down completely randomly.
Pair Corralation between NioCorp Developments and Eastman Kodak
Allowing for the 90-day total investment horizon NioCorp Developments Ltd is expected to under-perform the Eastman Kodak. But the stock apears to be less risky and, when comparing its historical volatility, NioCorp Developments Ltd is 2.54 times less risky than Eastman Kodak. The stock trades about -0.28 of its potential returns per unit of risk. The Eastman Kodak Co is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 472.00 in Eastman Kodak Co on September 2, 2024 and sell it today you would earn a total of 253.00 from holding Eastman Kodak Co or generate 53.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NioCorp Developments Ltd vs. Eastman Kodak Co
Performance |
| Timeline |
| NioCorp Developments |
| Eastman Kodak |
NioCorp Developments and Eastman Kodak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NioCorp Developments and Eastman Kodak
The main advantage of trading using opposite NioCorp Developments and Eastman Kodak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NioCorp Developments position performs unexpectedly, Eastman Kodak 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 Eastman Kodak will offset losses from the drop in Eastman Kodak's long position.| NioCorp Developments vs. Teck Resources Ltd | NioCorp Developments vs. Sigma Lithium Resources | NioCorp Developments vs. Vale SA ADR | NioCorp Developments vs. Sayona Mining Limited |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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