Correlation Between Reading International and Core Main
Can any of the company-specific risk be diversified away by investing in both Reading International and Core Main 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 Core Main into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reading International and Core Main, you can compare the effects of market volatilities on Reading International and Core Main 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 Core Main. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reading International and Core Main.
Diversification Opportunities for Reading International and Core Main
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Reading and Core is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Reading International and Core Main in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Main 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 Core Main. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Main has no effect on the direction of Reading International i.e., Reading International and Core Main go up and down completely randomly.
Pair Corralation between Reading International and Core Main
Considering the 90-day investment horizon Reading International is expected to generate 1.35 times more return on investment than Core Main. However, Reading International is 1.35 times more volatile than Core Main. It trades about 0.01 of its potential returns per unit of risk. Core Main is currently generating about -0.03 per unit of risk. If you would invest 155.00 in Reading International on August 30, 2024 and sell it today you would lose (9.00) from holding Reading International or give up 5.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reading International vs. Core Main
Performance |
| Timeline |
| Reading International |
| Core Main |
Reading International and Core Main Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reading International and Core Main
The main advantage of trading using opposite Reading International and Core Main positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reading International position performs unexpectedly, Core Main 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 Core Main will offset losses from the drop in Core Main's long position.| Reading International vs. Reservoir Media | Reading International vs. Marcus | Reading International vs. Gaia Inc | Reading International vs. News Corp B |
| Core Main vs. DXP Enterprises | Core Main vs. Watsco Inc | Core Main vs. Distribution Solutions Group | Core Main vs. SiteOne Landscape Supply |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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