Correlation Between Imax Corp and Reading International
Can any of the company-specific risk be diversified away by investing in both Imax Corp and Reading International 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 Reading International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imax Corp and Reading International, you can compare the effects of market volatilities on Imax Corp and Reading International 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 Reading International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imax Corp and Reading International.
Diversification Opportunities for Imax Corp and Reading International
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Imax and Reading is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Imax Corp and Reading International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reading International 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 Reading International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reading International has no effect on the direction of Imax Corp i.e., Imax Corp and Reading International go up and down completely randomly.
Pair Corralation between Imax Corp and Reading International
Given the investment horizon of 90 days Imax Corp is expected to generate 0.58 times more return on investment than Reading International. However, Imax Corp is 1.73 times less risky than Reading International. It trades about 0.18 of its potential returns per unit of risk. Reading International is currently generating about 0.02 per unit of risk. If you would invest 1,616 in Imax Corp on September 1, 2024 and sell it today you would earn a total of 1,016 from holding Imax Corp or generate 62.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imax Corp vs. Reading International
Performance |
| Timeline |
| Imax Corp |
| Reading International |
Imax Corp and Reading International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imax Corp and Reading International
The main advantage of trading using opposite Imax Corp and Reading International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imax Corp position performs unexpectedly, Reading International 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 Reading International will offset losses from the drop in Reading International's long position.| Imax Corp vs. ADTRAN Inc | Imax Corp vs. Belden Inc | Imax Corp vs. ADC Therapeutics SA | Imax Corp vs. Comtech Telecommunications Corp |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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