Correlation Between Radcom and Eastman Kodak

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

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

Diversification Opportunities for Radcom and Eastman Kodak

0.67

Correlation Coefficient

Radcom  Eastman Kodak

Poor diversification

The 3 months correlation between Radcom and Eastman is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Radcom and Eastman Kodak Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Kodak and Radcom 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 Radcom 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 Radcom i.e., Radcom and Eastman Kodak go up and down completely randomly.

Pair Corralation between Radcom and Eastman Kodak

Given the investment horizon of 90 days Radcom is expected to generate 1.18 times more return on investment than Eastman Kodak. However, Radcom is 1.18 times more volatile than Eastman Kodak Co. It trades about 0.03 of its potential returns per unit of risk. Eastman Kodak Co is currently generating about -0.01 per unit of risk. If you would invest  1,188  in Radcom on December 29, 2024 and sell it today you would earn a total of  28.00  from holding Radcom or generate 2.36% return on investment over 90 days.

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

Radcom  vs.  Eastman Kodak Co

Radcom

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Radcom are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Radcom may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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.

Pair Trading with Radcom and Eastman Kodak

The main advantage of trading using opposite Radcom and Eastman Kodak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Radcom 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 Radcom 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.