Correlation Between Sphere Entertainment and PFIZER

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

Diversification Opportunities for Sphere Entertainment and PFIZER

0.48

Correlation Coefficient

Sphere Entertainment  PFIZER

Very weak diversification

The 3 months correlation between Sphere and PFIZER is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and PFIZER INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PFIZER INC 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 PFIZER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PFIZER INC has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and PFIZER go up and down completely randomly.

Pair Corralation between Sphere Entertainment and PFIZER

Given the investment horizon of 90 days Sphere Entertainment Co is expected to under-perform the PFIZER. In addition to that, Sphere Entertainment is 6.16 times more volatile than PFIZER INC. It trades about -0.07 of its total potential returns per unit of risk. PFIZER INC is currently generating about 0.07 per unit of volatility. If you would invest  8,491  in PFIZER INC on December 23, 2024 and sell it today you would earn a total of  187.00  from holding PFIZER INC or generate 2.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Sphere Entertainment Co  vs.  PFIZER 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 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.

PFIZER INC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PFIZER INC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, PFIZER 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 PFIZER

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

The idea behind Sphere Entertainment Co and PFIZER 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.