Correlation Between Sphere Entertainment and Hurco Companies

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

Diversification Opportunities for Sphere Entertainment and Hurco Companies

0.26

Correlation Coefficient

Sphere Entertainment  Hurco Companies

Modest diversification

The 3 months correlation between Sphere and Hurco is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Hurco Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hurco Companies 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 Hurco Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hurco Companies has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Hurco Companies go up and down completely randomly.

Pair Corralation between Sphere Entertainment and Hurco Companies

Given the investment horizon of 90 days Sphere Entertainment Co is expected to generate 1.23 times more return on investment than Hurco Companies. However, Sphere Entertainment is 1.23 times more volatile than Hurco Companies. It trades about 0.19 of its potential returns per unit of risk. Hurco Companies is currently generating about -0.13 per unit of risk. If you would invest  3,840  in Sphere Entertainment Co on October 13, 2024 and sell it today you would earn a total of  320.00  from holding Sphere Entertainment Co or generate 8.33% return on investment over 90 days.

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

Sphere Entertainment Co  vs.  Hurco Companies

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 latest conflicting performance, the Stock's technical indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Hurco Companies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hurco Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Sphere Entertainment and Hurco Companies

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

The idea behind Sphere Entertainment Co and Hurco Companies 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.