Correlation Between Eastman Kodak and Maximus

Can any of the company-specific risk be diversified away by investing in both Eastman Kodak and Maximus 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 Maximus 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 Maximus, you can compare the effects of market volatilities on Eastman Kodak and Maximus 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 Maximus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastman Kodak and Maximus.

Diversification Opportunities for Eastman Kodak and Maximus

-0.07

Correlation Coefficient

Eastman Kodak  Maximus

Good diversification

The 3 months correlation between Eastman and Maximus is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Eastman Kodak Co and Maximus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maximus 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 Maximus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maximus has no effect on the direction of Eastman Kodak i.e., Eastman Kodak and Maximus go up and down completely randomly.

Pair Corralation between Eastman Kodak and Maximus

Given the investment horizon of 90 days Eastman Kodak Co is expected to generate 1.82 times more return on investment than Maximus. However, Eastman Kodak is 1.82 times more volatile than Maximus. It trades about -0.01 of its potential returns per unit of risk. Maximus is currently generating about -0.06 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Eastman Kodak Co  vs.  Maximus

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.

Maximus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maximus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Eastman Kodak and Maximus

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

The idea behind Eastman Kodak Co and Maximus 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.