Correlation Between Sphere Entertainment and Aegon NV

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

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

Diversification Opportunities for Sphere Entertainment and Aegon NV

0.42

Correlation Coefficient

Sphere Entertainment  Aegon NV

Very weak diversification

The 3 months correlation between Sphere and Aegon is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Aegon NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon NV ADR and Sphere Entertainment 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 Sphere Entertainment Co are associated (or correlated) with Aegon NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegon NV ADR has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Aegon NV go up and down completely randomly.

Pair Corralation between Sphere Entertainment and Aegon NV

Given the investment horizon of 90 days Sphere Entertainment Co is expected to under-perform the Aegon NV. In addition to that, Sphere Entertainment is 1.63 times more volatile than Aegon NV ADR. It trades about -0.06 of its total potential returns per unit of risk. Aegon NV ADR is currently generating about -0.04 per unit of volatility. If you would invest  614.00  in Aegon NV ADR on October 3, 2024 and sell it today you would lose (25.00) from holding Aegon NV ADR or give up 4.07% of portfolio value over 90 days.

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

Sphere Entertainment Co  vs.  Aegon NV ADR

Sphere Entertainment

Risk-Adjusted Performance

0 of 100

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 weak 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.

Aegon NV ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aegon NV ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Aegon NV is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sphere Entertainment and Aegon NV

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

The idea behind Sphere Entertainment Co and Aegon NV ADR 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..