Correlation Between Sphere Entertainment and Founder Group

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

Diversification Opportunities for Sphere Entertainment and Founder Group

-0.03

Correlation Coefficient

Sphere Entertainment  Founder Group

Good diversification

The 3 months correlation between Sphere and Founder is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Founder Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Founder Group Limited 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 Founder Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Founder Group Limited has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Founder Group go up and down completely randomly.

Pair Corralation between Sphere Entertainment and Founder Group

Given the investment horizon of 90 days Sphere Entertainment Co is expected to generate 0.21 times more return on investment than Founder Group. However, Sphere Entertainment Co is 4.7 times less risky than Founder Group. It trades about 0.06 of its potential returns per unit of risk. Founder Group Limited is currently generating about 0.0 per unit of risk. If you would invest  2,186  in Sphere Entertainment Co on October 10, 2024 and sell it today you would earn a total of  1,951  from holding Sphere Entertainment Co or generate 89.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	10.69%
Values	Daily Returns

Sphere Entertainment Co  vs.  Founder Group Limited

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.

Founder Group Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Founder Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Founder Group is not utilizing all of its potentials. The new stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Sphere Entertainment and Founder Group

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

The idea behind Sphere Entertainment Co and Founder Group Limited 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.