Correlation Between Sphere Entertainment and Here Media

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

Diversification Opportunities for Sphere Entertainment and Here Media

0.0

Correlation Coefficient

Sphere Entertainment  Here Media

Pay attention - limited upside

The 3 months correlation between Sphere and Here is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Here Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Here Media 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 Here Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Here Media has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Here Media go up and down completely randomly.

Pair Corralation between Sphere Entertainment and Here Media

If you would invest  0.02  in Here Media on September 29, 2024 and sell it today you would earn a total of  0.00  from holding Here Media or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Sphere Entertainment Co  vs.  Here Media

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

Here Media

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Sphere Entertainment and Here Media

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

The idea behind Sphere Entertainment Co and Here Media 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.