Correlation Between Kimball Electronics and Eastman Kodak

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

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

Diversification Opportunities for Kimball Electronics and Eastman Kodak

-0.29

Correlation Coefficient

Kimball Electronics  Eastman Kodak

Very good diversification

The 3 months correlation between Kimball and Eastman is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and Eastman Kodak Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Kodak and Kimball Electronics 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 Kimball Electronics 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 Kimball Electronics i.e., Kimball Electronics and Eastman Kodak go up and down completely randomly.

Pair Corralation between Kimball Electronics and Eastman Kodak

Allowing for the 90-day total investment horizon Kimball Electronics is expected to generate 12.34 times less return on investment than Eastman Kodak. But when comparing it to its historical volatility, Kimball Electronics is 1.99 times less risky than Eastman Kodak. It trades about 0.0 of its potential returns per unit of risk. Eastman Kodak Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  471.00  in Eastman Kodak Co on February 15, 2024 and sell it today you would earn a total of  23.00  from holding Eastman Kodak Co or generate 4.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Kimball Electronics  vs.  Eastman Kodak Co

Kimball Electronics

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kimball Electronics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Kimball Electronics is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Eastman Kodak

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eastman Kodak Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, Eastman Kodak disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kimball Electronics and Eastman Kodak

The main advantage of trading using opposite Kimball Electronics and Eastman Kodak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimball Electronics 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 Kimball Electronics 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.