Correlation Between Hamilton Beach and Eastman Kodak

Can any of the company-specific risk be diversified away by investing in both Hamilton Beach 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 Hamilton Beach and Eastman Kodak into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hamilton Beach Brands and Eastman Kodak Co, you can compare the effects of market volatilities on Hamilton Beach 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 Hamilton Beach with a short position of Eastman Kodak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Beach and Eastman Kodak.

Diversification Opportunities for Hamilton Beach and Eastman Kodak

0.65

Correlation Coefficient

Hamilton Beach  Eastman Kodak

Poor diversification

The 3 months correlation between Hamilton and Eastman is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Beach Brands and Eastman Kodak Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Kodak and Hamilton Beach 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 Hamilton Beach Brands 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 Hamilton Beach i.e., Hamilton Beach and Eastman Kodak go up and down completely randomly.

Pair Corralation between Hamilton Beach and Eastman Kodak

Considering the 90-day investment horizon Hamilton Beach Brands is expected to under-perform the Eastman Kodak. In addition to that, Hamilton Beach is 1.44 times more volatile than Eastman Kodak Co. It trades about -0.23 of its total potential returns per unit of risk. Eastman Kodak Co is currently generating about -0.12 per unit of volatility. If you would invest  485.00  in Eastman Kodak Co on February 1, 2024 and sell it today you would lose (35.00) from holding Eastman Kodak Co or give up 7.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Hamilton Beach Brands  vs.  Eastman Kodak Co

Hamilton Beach Brands

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Beach Brands are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent fundamental drivers, Hamilton Beach sustained solid returns over the last few months and may actually be approaching a breakup point.

Eastman Kodak

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eastman Kodak Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental indicators, Eastman Kodak disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hamilton Beach and Eastman Kodak

The main advantage of trading using opposite Hamilton Beach and Eastman Kodak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamilton Beach 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.

The idea behind Hamilton Beach Brands and Eastman Kodak Co 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..