Correlation Between Sphere Entertainment and Casio Computer

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

Diversification Opportunities for Sphere Entertainment and Casio Computer

-0.31

Correlation Coefficient

Sphere Entertainment  Casio Computer

Very good diversification

The 3 months correlation between Sphere and Casio is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Casio Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casio Computer 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 Casio Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casio Computer has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Casio Computer go up and down completely randomly.

Pair Corralation between Sphere Entertainment and Casio Computer

Given the investment horizon of 90 days Sphere Entertainment Co is expected to under-perform the Casio Computer. In addition to that, Sphere Entertainment is 1.32 times more volatile than Casio Computer Co. It trades about -0.09 of its total potential returns per unit of risk. Casio Computer Co is currently generating about -0.03 per unit of volatility. If you would invest  8,343  in Casio Computer Co on December 28, 2024 and sell it today you would lose (488.00) from holding Casio Computer Co or give up 5.85% of portfolio value over 90 days.

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

Sphere Entertainment Co  vs.  Casio Computer Co

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 conflicting 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.

Casio Computer

Risk-Adjusted Performance

Weak

Over the last 90 days Casio Computer Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Casio Computer is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sphere Entertainment and Casio Computer

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

The idea behind Sphere Entertainment Co and Casio Computer 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.