Correlation Between Reading International and Atlanta Braves

Can any of the company-specific risk be diversified away by investing in both Reading International and Atlanta Braves 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 Atlanta Braves into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Reading International B and Atlanta Braves Holdings, you can compare the effects of market volatilities on Reading International and Atlanta Braves 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 Atlanta Braves. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reading International and Atlanta Braves.

Diversification Opportunities for Reading International and Atlanta Braves

-0.64

Correlation Coefficient

Reading International  Atlanta Braves

Excellent diversification

The 3 months correlation between Reading and Atlanta is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Reading International B and Atlanta Braves Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlanta Braves Holdings 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 B are associated (or correlated) with Atlanta Braves. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlanta Braves Holdings has no effect on the direction of Reading International i.e., Reading International and Atlanta Braves go up and down completely randomly.

Pair Corralation between Reading International and Atlanta Braves

Given the investment horizon of 90 days Reading International B is expected to generate 2.32 times more return on investment than Atlanta Braves. However, Reading International is 2.32 times more volatile than Atlanta Braves Holdings. It trades about 0.22 of its potential returns per unit of risk. Atlanta Braves Holdings is currently generating about -0.08 per unit of risk. If you would invest  1,400  in Reading International B on February 5, 2024 and sell it today you would earn a total of  180.00  from holding Reading International B or generate 12.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	90.91%
Values	Daily Returns

Reading International B  vs.  Atlanta Braves Holdings

Reading International

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Reading International B are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain forward indicators, Reading International sustained solid returns over the last few months and may actually be approaching a breakup point.

Atlanta Braves Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlanta Braves Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Atlanta Braves is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Reading International and Atlanta Braves

The main advantage of trading using opposite Reading International and Atlanta Braves positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reading International position performs unexpectedly, Atlanta Braves 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 Atlanta Braves will offset losses from the drop in Atlanta Braves' long position.

The idea behind Reading International B and Atlanta Braves Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.