Correlation Between SmartStop Self and Eastman Kodak

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

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

Diversification Opportunities for SmartStop Self and Eastman Kodak

0.22

Correlation Coefficient

SmartStop Self  Eastman Kodak

Modest diversification

The 3 months correlation between SmartStop and Eastman is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding SmartStop Self Storage and Eastman Kodak Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Kodak and SmartStop Self 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 SmartStop Self Storage 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 SmartStop Self i.e., SmartStop Self and Eastman Kodak go up and down completely randomly.

Pair Corralation between SmartStop Self and Eastman Kodak

Assuming the 90 days horizon SmartStop Self Storage is expected to under-perform the Eastman Kodak. But the pink sheet apears to be less risky and, when comparing its historical volatility, SmartStop Self Storage is 5.38 times less risky than Eastman Kodak. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Eastman Kodak Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  504.00  in Eastman Kodak Co on September 2, 2024 and sell it today you would earn a total of  221.00  from holding Eastman Kodak Co or generate 43.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

SmartStop Self Storage  vs.  Eastman Kodak Co

SmartStop Self Storage

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 SmartStop Self and Eastman Kodak

The main advantage of trading using opposite SmartStop Self and Eastman Kodak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SmartStop Self 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 SmartStop Self Storage 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.