Correlation Between Sphere Entertainment and AGNC Investment

Can any of the company-specific risk be diversified away by investing in both Sphere Entertainment and AGNC Investment 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 AGNC Investment 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 AGNC Investment Corp, you can compare the effects of market volatilities on Sphere Entertainment and AGNC Investment 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 AGNC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sphere Entertainment and AGNC Investment.

Diversification Opportunities for Sphere Entertainment and AGNC Investment

0.09

Correlation Coefficient

Sphere Entertainment  AGNC Investment

Significant diversification

The 3 months correlation between Sphere and AGNC is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and AGNC Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGNC Investment Corp 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 AGNC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGNC Investment Corp has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and AGNC Investment go up and down completely randomly.

Pair Corralation between Sphere Entertainment and AGNC Investment

Given the investment horizon of 90 days Sphere Entertainment Co is expected to under-perform the AGNC Investment. In addition to that, Sphere Entertainment is 3.08 times more volatile than AGNC Investment Corp. It trades about -0.08 of its total potential returns per unit of risk. AGNC Investment Corp is currently generating about 0.21 per unit of volatility. If you would invest  911.00  in AGNC Investment Corp on December 20, 2024 and sell it today you would earn a total of  118.00  from holding AGNC Investment Corp or generate 12.95% return on investment over 90 days.

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

Sphere Entertainment Co  vs.  AGNC Investment Corp

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 unfluctuating performance in the last few months, the Stock's technical indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

AGNC Investment Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AGNC Investment Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, AGNC Investment exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sphere Entertainment and AGNC Investment

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

The idea behind Sphere Entertainment Co and AGNC Investment Corp 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.