The video below shows how to make an inexpensive tool (elastic head ball) to train hand-eye coordination. Although the video is not in English, the instructions are simple enough. All that you’ll need is a hat, a tennis ball, and an elastic cord.
Kostya Tszyu is one fighter who often trained with a similar device. You can see an example at the 10 second mark below:
Vasyl Lomachenko can also be seen using something similar here:
As for applications, such a drill can be a fun addition to your training arsenal. Aside from the hand-eye coordination benefits, it is also useful that this drill will not be strenuous to the body. You can easily include some reaction training with this tool without detracting from your primary training objectives.
“Creativity is a natural extension of our enthusiasm.” – Earl Nightingale