Correlation Between Light Wonder and Sports Entertainment

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

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

Diversification Opportunities for Light Wonder and Sports Entertainment

0.0

Correlation Coefficient

Light Wonder  Sports Entertainment

Pay attention - limited upside

The 3 months correlation between Light and Sports is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Light Wonder and Sports Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sports Entertainment and Light Wonder 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 Light Wonder are associated (or correlated) with Sports Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sports Entertainment has no effect on the direction of Light Wonder i.e., Light Wonder and Sports Entertainment go up and down completely randomly.

Pair Corralation between Light Wonder and Sports Entertainment

If you would invest  0.00  in Light Wonder on October 25, 2024 and sell it today you would earn a total of  0.00  from holding Light Wonder or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

Light Wonder  vs.  Sports Entertainment Group

Light Wonder

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Light Wonder has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Light Wonder is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Sports Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Light Wonder and Sports Entertainment

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

The idea behind Light Wonder and Sports Entertainment Group 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.