Correlation Between Aterian and Eastman Kodak

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

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

Diversification Opportunities for Aterian and Eastman Kodak

-0.62

Correlation Coefficient

Aterian  Eastman Kodak

Excellent diversification

The 3 months correlation between Aterian and Eastman is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Aterian and Eastman Kodak Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Kodak and Aterian 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 Aterian 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 Aterian i.e., Aterian and Eastman Kodak go up and down completely randomly.

Pair Corralation between Aterian and Eastman Kodak

Given the investment horizon of 90 days Aterian is expected to under-perform the Eastman Kodak. But the stock apears to be less risky and, when comparing its historical volatility, Aterian is 1.82 times less risky than Eastman Kodak. The stock trades about -0.3 of its potential returns per unit of risk. The Eastman Kodak Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  625.00  in Eastman Kodak Co on September 24, 2024 and sell it today you would earn a total of  60.00  from holding Eastman Kodak Co or generate 9.6% return on investment over 90 days.

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

Aterian  vs.  Eastman Kodak Co

Aterian

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aterian has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Eastman Kodak

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eastman Kodak Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating fundamental indicators, Eastman Kodak disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aterian and Eastman Kodak

The main advantage of trading using opposite Aterian and Eastman Kodak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aterian 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 Aterian 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.