Correlation Between TFI International and Eastman Kodak

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

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

Diversification Opportunities for TFI International and Eastman Kodak

0.38

Correlation Coefficient

TFI International  Eastman Kodak

Weak diversification

The 3 months correlation between TFI and Eastman is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and Eastman Kodak Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Kodak and TFI International 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 TFI International 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 TFI International i.e., TFI International and Eastman Kodak go up and down completely randomly.

Pair Corralation between TFI International and Eastman Kodak

Given the investment horizon of 90 days TFI International is expected to under-perform the Eastman Kodak. But the stock apears to be less risky and, when comparing its historical volatility, TFI International is 1.04 times less risky than Eastman Kodak. The stock trades about -0.24 of its potential returns per unit of risk. The Eastman Kodak Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  685.00  in Eastman Kodak Co on December 28, 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

TFI International  vs.  Eastman Kodak Co

TFI International

Risk-Adjusted Performance

Very Weak

Over the last 90 days TFI International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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 TFI International and Eastman Kodak

The main advantage of trading using opposite TFI International and Eastman Kodak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFI International 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 TFI International 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.