Correlation Between Sphere Entertainment and 459506AS0

Can any of the company-specific risk be diversified away by investing in both Sphere Entertainment and 459506AS0 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 459506AS0 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 IFF 3468 01 DEC 50, you can compare the effects of market volatilities on Sphere Entertainment and 459506AS0 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 459506AS0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sphere Entertainment and 459506AS0.

Diversification Opportunities for Sphere Entertainment and 459506AS0

-0.44

Correlation Coefficient

Sphere Entertainment  459506AS0

Very good diversification

The 3 months correlation between Sphere and 459506AS0 is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and IFF 3468 01 DEC 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IFF 3468 01 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 459506AS0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IFF 3468 01 has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and 459506AS0 go up and down completely randomly.

Pair Corralation between Sphere Entertainment and 459506AS0

Given the investment horizon of 90 days Sphere Entertainment Co is expected to generate 2.21 times more return on investment than 459506AS0. However, Sphere Entertainment is 2.21 times more volatile than IFF 3468 01 DEC 50. It trades about -0.04 of its potential returns per unit of risk. IFF 3468 01 DEC 50 is currently generating about -0.13 per unit of risk. If you would invest  4,433  in Sphere Entertainment Co on October 25, 2024 and sell it today you would lose (283.00) from holding Sphere Entertainment Co or give up 6.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.31%
Values	Daily Returns

Sphere Entertainment Co  vs.  IFF 3468 01 DEC 50

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

IFF 3468 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IFF 3468 01 DEC 50 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for IFF 3468 01 DEC 50 investors.

Pair Trading with Sphere Entertainment and 459506AS0

The main advantage of trading using opposite Sphere Entertainment and 459506AS0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sphere Entertainment position performs unexpectedly, 459506AS0 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 459506AS0 will offset losses from the drop in 459506AS0's long position.

The idea behind Sphere Entertainment Co and IFF 3468 01 DEC 50 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.