Correlation Between Reading International and Imax Corp
Can any of the company-specific risk be diversified away by investing in both Reading International and Imax Corp 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 Imax Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reading International and Imax Corp, you can compare the effects of market volatilities on Reading International and Imax Corp 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 Imax Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reading International and Imax Corp.
Diversification Opportunities for Reading International and Imax Corp
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Reading and Imax is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Reading International and Imax Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imax Corp 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 Imax Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imax Corp has no effect on the direction of Reading International i.e., Reading International and Imax Corp go up and down completely randomly.
Pair Corralation between Reading International and Imax Corp
Considering the 90-day investment horizon Reading International is expected to under-perform the Imax Corp. In addition to that, Reading International is 1.43 times more volatile than Imax Corp. It trades about -0.03 of its total potential returns per unit of risk. Imax Corp is currently generating about 0.05 per unit of volatility. If you would invest 1,655 in Imax Corp on August 30, 2024 and sell it today you would earn a total of 948.00 from holding Imax Corp or generate 57.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reading International vs. Imax Corp
Performance |
| Timeline |
| Reading International |
| Imax Corp |
Reading International and Imax Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reading International and Imax Corp
The main advantage of trading using opposite Reading International and Imax Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reading International position performs unexpectedly, Imax Corp 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 Imax Corp will offset losses from the drop in Imax Corp's long position.| Reading International vs. News Corp A | Reading International vs. Marcus | Reading International vs. Liberty Media | Reading International vs. Fox Corp Class |
| Imax Corp vs. Marcus | Imax Corp vs. Dave Busters Entertainment | Imax Corp vs. AMC Networks | Imax Corp vs. News Corp A |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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