Correlation Between Sphere Entertainment and SUMIBK

Can any of the company-specific risk be diversified away by investing in both Sphere Entertainment and SUMIBK 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 SUMIBK 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 SUMIBK 293 17 SEP 41, you can compare the effects of market volatilities on Sphere Entertainment and SUMIBK 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 SUMIBK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sphere Entertainment and SUMIBK.

Diversification Opportunities for Sphere Entertainment and SUMIBK

0.64

Correlation Coefficient

Sphere Entertainment  SUMIBK

Poor diversification

The 3 months correlation between Sphere and SUMIBK is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and SUMIBK 293 17 SEP 41 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUMIBK 293 17 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 SUMIBK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUMIBK 293 17 has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and SUMIBK go up and down completely randomly.

Pair Corralation between Sphere Entertainment and SUMIBK

Given the investment horizon of 90 days Sphere Entertainment Co is expected to generate 2.14 times more return on investment than SUMIBK. However, Sphere Entertainment is 2.14 times more volatile than SUMIBK 293 17 SEP 41. It trades about 0.06 of its potential returns per unit of risk. SUMIBK 293 17 SEP 41 is currently generating about 0.01 per unit of risk. If you would invest  2,186  in Sphere Entertainment Co on October 10, 2024 and sell it today you would earn a total of  1,995  from holding Sphere Entertainment Co or generate 91.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	46.26%
Values	Daily Returns

Sphere Entertainment Co  vs.  SUMIBK 293 17 SEP 41

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

SUMIBK 293 17

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SUMIBK 293 17 SEP 41 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SUMIBK is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sphere Entertainment and SUMIBK

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

The idea behind Sphere Entertainment Co and SUMIBK 293 17 SEP 41 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.