Correlation Between Sycamore Entmt and Reading International

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

By analyzing existing cross correlation between Sycamore Entmt Grp and Reading International B, you can compare the effects of market volatilities on Sycamore Entmt 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 Sycamore Entmt with a short position of Reading International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sycamore Entmt and Reading International.

Diversification Opportunities for Sycamore Entmt and Reading International

-0.19

Correlation Coefficient

Sycamore Entmt  Reading International

Good diversification

The 3 months correlation between Sycamore and Reading is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sycamore Entmt Grp and Reading International B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reading International and Sycamore Entmt 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 Sycamore Entmt Grp 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 Sycamore Entmt i.e., Sycamore Entmt and Reading International go up and down completely randomly.

Pair Corralation between Sycamore Entmt and Reading International

Given the investment horizon of 90 days Sycamore Entmt Grp is expected to generate 1.77 times more return on investment than Reading International. However, Sycamore Entmt is 1.77 times more volatile than Reading International B. It trades about 0.05 of its potential returns per unit of risk. Reading International B is currently generating about 0.0 per unit of risk. If you would invest  0.08  in Sycamore Entmt Grp on December 29, 2024 and sell it today you would lose (0.01) from holding Sycamore Entmt Grp or give up 12.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.71%
Values	Daily Returns

Sycamore Entmt Grp  vs.  Reading International B

Sycamore Entmt Grp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sycamore Entmt Grp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical and fundamental indicators, Sycamore Entmt demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Reading International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Reading International B has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Reading International is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sycamore Entmt and Reading International

The main advantage of trading using opposite Sycamore Entmt and Reading International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sycamore Entmt 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.

The idea behind Sycamore Entmt Grp and Reading International B 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.