Correlation Between Sun Country and Eastman Kodak

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

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

Diversification Opportunities for Sun Country and Eastman Kodak

0.54

Correlation Coefficient

Sun Country  Eastman Kodak

Very weak diversification

The 3 months correlation between Sun and Eastman is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and Eastman Kodak Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Kodak and Sun Country 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 Sun Country Airlines 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 Sun Country i.e., Sun Country and Eastman Kodak go up and down completely randomly.

Pair Corralation between Sun Country and Eastman Kodak

Given the investment horizon of 90 days Sun Country is expected to generate 10.28 times less return on investment than Eastman Kodak. But when comparing it to its historical volatility, Sun Country Airlines is 2.15 times less risky than Eastman Kodak. It trades about 0.08 of its potential returns per unit of risk. Eastman Kodak Co is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest  457.00  in Eastman Kodak Co on September 18, 2024 and sell it today you would earn a total of  272.50  from holding Eastman Kodak Co or generate 59.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Sun Country Airlines  vs.  Eastman Kodak Co

Sun Country Airlines

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Country Airlines are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental indicators, Sun Country showed solid returns over the last few months and may actually be approaching a breakup point.

Eastman Kodak

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eastman Kodak Co are ranked lower than 11 (%) 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 Sun Country and Eastman Kodak

The main advantage of trading using opposite Sun Country and Eastman Kodak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Country 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 Sun Country Airlines 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.