Correlation Between Eastman Kodak and Entegris

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

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

Diversification Opportunities for Eastman Kodak and Entegris

0.78

Correlation Coefficient

Eastman Kodak  Entegris

Poor diversification

The 3 months correlation between Eastman and Entegris is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Kodak Co and Entegris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entegris and Eastman Kodak 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 Eastman Kodak Co are associated (or correlated) with Entegris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entegris has no effect on the direction of Eastman Kodak i.e., Eastman Kodak and Entegris go up and down completely randomly.

Pair Corralation between Eastman Kodak and Entegris

Given the investment horizon of 90 days Eastman Kodak Co is expected to generate 1.34 times more return on investment than Entegris. However, Eastman Kodak is 1.34 times more volatile than Entegris. It trades about -0.01 of its potential returns per unit of risk. Entegris is currently generating about -0.03 per unit of risk. If you would invest  685.00  in Eastman Kodak Co on December 29, 2024 and sell it today you would lose (35.00) from holding Eastman Kodak Co or give up 5.11% of portfolio value over 90 days.

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

Eastman Kodak Co  vs.  Entegris

Eastman Kodak

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eastman Kodak Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Eastman Kodak is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Entegris

Risk-Adjusted Performance

Very Weak

Over the last 90 days Entegris has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Entegris is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Eastman Kodak and Entegris

The main advantage of trading using opposite Eastman Kodak and Entegris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastman Kodak position performs unexpectedly, Entegris 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 Entegris will offset losses from the drop in Entegris' long position.

The idea behind Eastman Kodak Co and Entegris 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.