Correlation Between Sphere Entertainment and News Corp

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

Diversification Opportunities for Sphere Entertainment and News Corp

0.62

Correlation Coefficient

Sphere Entertainment  News Corp

Poor diversification

The 3 months correlation between Sphere and News is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and News Corp B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on News Corp B 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 News Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of News Corp B has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and News Corp go up and down completely randomly.

Pair Corralation between Sphere Entertainment and News Corp

Given the investment horizon of 90 days Sphere Entertainment Co is expected to under-perform the News Corp. In addition to that, Sphere Entertainment is 2.26 times more volatile than News Corp B. It trades about -0.08 of its total potential returns per unit of risk. News Corp B is currently generating about 0.01 per unit of volatility. If you would invest  3,023  in News Corp B on December 28, 2024 and sell it today you would earn a total of  3.00  from holding News Corp B or generate 0.1% return on investment over 90 days.

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

Sphere Entertainment Co  vs.  News Corp B

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.

News Corp B

Risk-Adjusted Performance

Very Weak

Over the last 90 days News Corp B has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, News Corp is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Sphere Entertainment and News Corp

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

The idea behind Sphere Entertainment Co and News Corp B 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.