Correlation Between Reading International and Abits
Can any of the company-specific risk be diversified away by investing in both Reading International and Abits 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 Reading International and Abits into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reading International and Abits Group, you can compare the effects of market volatilities on Reading International and Abits 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 Reading International with a short position of Abits. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reading International and Abits.
Diversification Opportunities for Reading International and Abits
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Reading and Abits is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Reading International and Abits Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abits Group and Reading 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 Reading International are associated (or correlated) with Abits. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abits Group has no effect on the direction of Reading International i.e., Reading International and Abits go up and down completely randomly.
Pair Corralation between Reading International and Abits
Considering the 90-day investment horizon Reading International is expected to under-perform the Abits. But the stock apears to be less risky and, when comparing its historical volatility, Reading International is 1.84 times less risky than Abits. The stock trades about -0.04 of its potential returns per unit of risk. The Abits Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 86.00 in Abits Group on September 2, 2024 and sell it today you would lose (24.00) from holding Abits Group or give up 27.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reading International vs. Abits Group
Performance |
| Timeline |
| Reading International |
| Abits Group |
Reading International and Abits Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reading International and Abits
The main advantage of trading using opposite Reading International and Abits positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reading International position performs unexpectedly, Abits 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 Abits will offset losses from the drop in Abits' long position.| Reading International vs. Reservoir Media | Reading International vs. Marcus | Reading International vs. Gaia Inc | Reading International vs. News Corp B |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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