Correlation Between Sphere Entertainment and Atmos Energy

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

Diversification Opportunities for Sphere Entertainment and Atmos Energy

-0.1

Correlation Coefficient

Sphere Entertainment  Atmos Energy

Good diversification

The 3 months correlation between Sphere and Atmos is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Atmos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atmos Energy 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 Atmos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atmos Energy has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Atmos Energy go up and down completely randomly.

Pair Corralation between Sphere Entertainment and Atmos Energy

Given the investment horizon of 90 days Sphere Entertainment Co is expected to under-perform the Atmos Energy. In addition to that, Sphere Entertainment is 2.59 times more volatile than Atmos Energy. It trades about -0.01 of its total potential returns per unit of risk. Atmos Energy is currently generating about 0.02 per unit of volatility. If you would invest  13,743  in Atmos Energy on October 8, 2024 and sell it today you would earn a total of  136.00  from holding Atmos Energy or generate 0.99% return on investment over 90 days.

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

Sphere Entertainment Co  vs.  Atmos Energy

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 relatively invariable technical indicators, Sphere Entertainment is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Atmos Energy

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Atmos Energy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Atmos Energy is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Sphere Entertainment and Atmos Energy

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

The idea behind Sphere Entertainment Co and Atmos Energy 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..