Correlation Between Sphere Entertainment and MARVELL

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

Diversification Opportunities for Sphere Entertainment and MARVELL

-0.46

Correlation Coefficient

Sphere Entertainment  MARVELL

Very good diversification

The 3 months correlation between Sphere and MARVELL is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and MARVELL TECHNOLOGY GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARVELL TECHNOLOGY 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 MARVELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARVELL TECHNOLOGY has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and MARVELL go up and down completely randomly.

Pair Corralation between Sphere Entertainment and MARVELL

Given the investment horizon of 90 days Sphere Entertainment Co is expected to generate 1.07 times more return on investment than MARVELL. However, Sphere Entertainment is 1.07 times more volatile than MARVELL TECHNOLOGY GROUP. It trades about 0.18 of its potential returns per unit of risk. MARVELL TECHNOLOGY GROUP is currently generating about -0.37 per unit of risk. If you would invest  3,905  in Sphere Entertainment Co on October 7, 2024 and sell it today you would earn a total of  341.00  from holding Sphere Entertainment Co or generate 8.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	30.0%
Values	Daily Returns

Sphere Entertainment Co  vs.  MARVELL TECHNOLOGY GROUP

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.

MARVELL TECHNOLOGY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MARVELL TECHNOLOGY GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for MARVELL TECHNOLOGY GROUP investors.

Pair Trading with Sphere Entertainment and MARVELL

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

The idea behind Sphere Entertainment Co and MARVELL TECHNOLOGY GROUP 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.