Correlation Between Sphere Entertainment and Osaka Steel

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

Diversification Opportunities for Sphere Entertainment and Osaka Steel

0.0

Correlation Coefficient

Sphere Entertainment  Osaka Steel

Pay attention - limited upside

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

Pair Corralation between Sphere Entertainment and Osaka Steel

Given the investment horizon of 90 days Sphere Entertainment Co is expected to generate 60.75 times more return on investment than Osaka Steel. However, Sphere Entertainment is 60.75 times more volatile than Osaka Steel Co,. It trades about 0.06 of its potential returns per unit of risk. Osaka Steel Co, is currently generating about 0.06 per unit of risk. If you would invest  2,022  in Sphere Entertainment Co on September 24, 2024 and sell it today you would earn a total of  1,848  from holding Sphere Entertainment Co or generate 91.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Sphere Entertainment Co  vs.  Osaka Steel Co,

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 latest stock price agitation, may contribute to short-term losses for the retail investors.

Osaka Steel Co,

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Osaka Steel Co, are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Osaka Steel is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sphere Entertainment and Osaka Steel

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

The idea behind Sphere Entertainment Co and Osaka Steel 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.