Correlation Between Emerson Radio and Eastman Kodak
Can any of the company-specific risk be diversified away by investing in both Emerson Radio 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 Emerson Radio and Eastman Kodak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerson Radio and Eastman Kodak Co, you can compare the effects of market volatilities on Emerson Radio 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 Emerson Radio with a short position of Eastman Kodak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Radio and Eastman Kodak.
Diversification Opportunities for Emerson Radio and Eastman Kodak
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Emerson and Eastman is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Radio and Eastman Kodak Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Kodak and Emerson Radio 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 Emerson Radio 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 Emerson Radio i.e., Emerson Radio and Eastman Kodak go up and down completely randomly.
Pair Corralation between Emerson Radio and Eastman Kodak
Considering the 90-day investment horizon Emerson Radio is expected to generate 0.92 times more return on investment than Eastman Kodak. However, Emerson Radio is 1.09 times less risky than Eastman Kodak. It trades about 0.05 of its potential returns per unit of risk. Eastman Kodak Co is currently generating about 0.04 per unit of risk. If you would invest 54.00 in Emerson Radio on January 24, 2024 and sell it today you would earn a total of 1.00 from holding Emerson Radio or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerson Radio vs. Eastman Kodak Co
Performance |
| Timeline |
| Emerson Radio |
| Eastman Kodak |
Emerson Radio and Eastman Kodak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Radio and Eastman Kodak
The main advantage of trading using opposite Emerson Radio and Eastman Kodak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Radio 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.| Emerson Radio vs. Brunswick | Emerson Radio vs. Ralph Lauren Corp | Emerson Radio vs. Under Armour C | Emerson Radio vs. Dogness International Corp |
| Eastman Kodak vs. LG Display Co | Eastman Kodak vs. Sony Corp | Eastman Kodak vs. Sonos Inc | Eastman Kodak vs. Vizio Holding Corp |
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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