Correlation Between Imax Corp and Paramount Global

Can any of the company-specific risk be diversified away by investing in both Imax Corp and Paramount Global 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 Imax Corp and Paramount Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Imax Corp and Paramount Global Class, you can compare the effects of market volatilities on Imax Corp and Paramount Global 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 Imax Corp with a short position of Paramount Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imax Corp and Paramount Global.

Diversification Opportunities for Imax Corp and Paramount Global

0.49

Correlation Coefficient

Imax Corp  Paramount Global

Very weak diversification

The 3 months correlation between Imax and Paramount is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Imax Corp and Paramount Global Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paramount Global Class and Imax Corp 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 Imax Corp are associated (or correlated) with Paramount Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paramount Global Class has no effect on the direction of Imax Corp i.e., Imax Corp and Paramount Global go up and down completely randomly.

Pair Corralation between Imax Corp and Paramount Global

Given the investment horizon of 90 days Imax Corp is expected to generate 1.26 times less return on investment than Paramount Global. In addition to that, Imax Corp is 1.17 times more volatile than Paramount Global Class. It trades about 0.09 of its total potential returns per unit of risk. Paramount Global Class is currently generating about 0.13 per unit of volatility. If you would invest  1,030  in Paramount Global Class on December 29, 2024 and sell it today you would earn a total of  126.00  from holding Paramount Global Class or generate 12.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Imax Corp  vs.  Paramount Global Class

Imax Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Imax Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Imax Corp may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Paramount Global Class

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Paramount Global Class are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Paramount Global sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Imax Corp and Paramount Global

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

The idea behind Imax Corp and Paramount Global Class 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.