Correlation Between Imax Corp and ADTRAN
Can any of the company-specific risk be diversified away by investing in both Imax Corp and ADTRAN 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 Imax Corp and ADTRAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imax Corp and ADTRAN Inc, you can compare the effects of market volatilities on Imax Corp and ADTRAN 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 Imax Corp with a short position of ADTRAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imax Corp and ADTRAN.
Diversification Opportunities for Imax Corp and ADTRAN
Poor diversification
The 3 months correlation between Imax and ADTRAN is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Imax Corp and ADTRAN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADTRAN Inc and Imax Corp 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 Imax Corp are associated (or correlated) with ADTRAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADTRAN Inc has no effect on the direction of Imax Corp i.e., Imax Corp and ADTRAN go up and down completely randomly.
Pair Corralation between Imax Corp and ADTRAN
Given the investment horizon of 90 days Imax Corp is expected to generate 0.63 times more return on investment than ADTRAN. However, Imax Corp is 1.58 times less risky than ADTRAN. It trades about 0.05 of its potential returns per unit of risk. ADTRAN Inc is currently generating about -0.03 per unit of risk. If you would invest 1,615 in Imax Corp on August 27, 2024 and sell it today you would earn a total of 904.00 from holding Imax Corp or generate 55.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imax Corp vs. ADTRAN Inc
Performance |
| Timeline |
| Imax Corp |
| ADTRAN Inc |
Imax Corp and ADTRAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imax Corp and ADTRAN
The main advantage of trading using opposite Imax Corp and ADTRAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imax Corp position performs unexpectedly, ADTRAN 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 ADTRAN will offset losses from the drop in ADTRAN's long position.| Imax Corp vs. Marcus | Imax Corp vs. Dave Busters Entertainment | Imax Corp vs. AMC Networks | Imax Corp vs. News Corp A |
| ADTRAN vs. Mynaric AG ADR | ADTRAN vs. KVH Industries | ADTRAN vs. Telesat Corp | ADTRAN vs. Digi International |
Check out your portfolio center.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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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