Correlation Between Sphere Entertainment and HONEYWELL

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

Diversification Opportunities for Sphere Entertainment and HONEYWELL

0.21

Correlation Coefficient

Sphere Entertainment  HONEYWELL

Modest diversification

The 3 months correlation between Sphere and HONEYWELL is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and HONEYWELL INTERNATIONAL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HONEYWELL INTERNATIONAL 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 HONEYWELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HONEYWELL INTERNATIONAL has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and HONEYWELL go up and down completely randomly.

Pair Corralation between Sphere Entertainment and HONEYWELL

Given the investment horizon of 90 days Sphere Entertainment Co is expected to under-perform the HONEYWELL. In addition to that, Sphere Entertainment is 4.48 times more volatile than HONEYWELL INTERNATIONAL INC. It trades about -0.08 of its total potential returns per unit of risk. HONEYWELL INTERNATIONAL INC is currently generating about 0.04 per unit of volatility. If you would invest  8,172  in HONEYWELL INTERNATIONAL INC on December 24, 2024 and sell it today you would earn a total of  142.00  from holding HONEYWELL INTERNATIONAL INC or generate 1.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Sphere Entertainment Co  vs.  HONEYWELL INTERNATIONAL INC

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 inconsistent 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.

HONEYWELL INTERNATIONAL

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HONEYWELL INTERNATIONAL INC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, HONEYWELL is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sphere Entertainment and HONEYWELL

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

The idea behind Sphere Entertainment Co and HONEYWELL INTERNATIONAL INC 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.