Correlation Between Hooker Furniture and Sphere Entertainment

Can any of the company-specific risk be diversified away by investing in both Hooker Furniture and Sphere Entertainment 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 Hooker Furniture and Sphere Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hooker Furniture and Sphere Entertainment Co, you can compare the effects of market volatilities on Hooker Furniture and Sphere Entertainment 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 Hooker Furniture with a short position of Sphere Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hooker Furniture and Sphere Entertainment.

Diversification Opportunities for Hooker Furniture and Sphere Entertainment

0.41

Correlation Coefficient

Hooker Furniture  Sphere Entertainment

Very weak diversification

The 3 months correlation between Hooker and Sphere is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and Sphere Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere Entertainment and Hooker Furniture 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 Hooker Furniture are associated (or correlated) with Sphere Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sphere Entertainment has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and Sphere Entertainment go up and down completely randomly.

Pair Corralation between Hooker Furniture and Sphere Entertainment

Given the investment horizon of 90 days Hooker Furniture is expected to under-perform the Sphere Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Hooker Furniture is 1.58 times less risky than Sphere Entertainment. The stock trades about -0.17 of its potential returns per unit of risk. The Sphere Entertainment Co is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  3,808  in Sphere Entertainment Co on December 27, 2024 and sell it today you would lose (429.00) from holding Sphere Entertainment Co or give up 11.27% of portfolio value over 90 days.

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

Hooker Furniture  vs.  Sphere Entertainment Co

Hooker Furniture

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hooker Furniture has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Sphere Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sphere Entertainment Co has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's technical indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Hooker Furniture and Sphere Entertainment

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

The idea behind Hooker Furniture and Sphere Entertainment Co 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.