Correlation Between New Wave and Reading International
Can any of the company-specific risk be diversified away by investing in both New Wave 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 New Wave and Reading International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Wave Holdings and Reading International, you can compare the effects of market volatilities on New Wave 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 New Wave with a short position of Reading International. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Wave and Reading International.
Diversification Opportunities for New Wave and Reading International
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between New and Reading is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding New Wave Holdings and Reading International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reading International and New Wave 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 New Wave Holdings 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 New Wave i.e., New Wave and Reading International go up and down completely randomly.
Pair Corralation between New Wave and Reading International
Assuming the 90 days horizon New Wave Holdings is expected to generate 4.71 times more return on investment than Reading International. However, New Wave is 4.71 times more volatile than Reading International. It trades about 0.13 of its potential returns per unit of risk. Reading International is currently generating about 0.06 per unit of risk. If you would invest 0.98 in New Wave Holdings on August 31, 2024 and sell it today you would earn a total of 0.23 from holding New Wave Holdings or generate 23.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Wave Holdings vs. Reading International
Performance |
| Timeline |
| New Wave Holdings |
| Reading International |
New Wave and Reading International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Wave and Reading International
The main advantage of trading using opposite New Wave and Reading International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Wave 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.| New Wave vs. ZoomerMedia Limited | New Wave vs. OverActive Media Corp | New Wave vs. Network Media Group | New Wave vs. Celtic plc |
| Reading International vs. Roku Inc | Reading International vs. AMC Entertainment Holdings | Reading International vs. Paramount Global Class | Reading International vs. Warner Bros Discovery |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |