Correlation Between ANZNZ and Sphere Entertainment

Can any of the company-specific risk be diversified away by investing in both ANZNZ and Sphere Entertainment 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 ANZNZ and Sphere Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ANZNZ 5175122 18 FEB 25 and Sphere Entertainment Co, you can compare the effects of market volatilities on ANZNZ and Sphere Entertainment 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 ANZNZ with a short position of Sphere Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANZNZ and Sphere Entertainment.

Diversification Opportunities for ANZNZ and Sphere Entertainment

0.27

Correlation Coefficient

ANZNZ  Sphere Entertainment

Modest diversification

The 3 months correlation between ANZNZ and Sphere is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding ANZNZ 5175122 18 FEB 25 and Sphere Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere Entertainment and ANZNZ 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 ANZNZ 5175122 18 FEB 25 are associated (or correlated) with Sphere Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sphere Entertainment has no effect on the direction of ANZNZ i.e., ANZNZ and Sphere Entertainment go up and down completely randomly.

Pair Corralation between ANZNZ and Sphere Entertainment

Assuming the 90 days trading horizon ANZNZ is expected to generate 13.91 times less return on investment than Sphere Entertainment. But when comparing it to its historical volatility, ANZNZ 5175122 18 FEB 25 is 3.25 times less risky than Sphere Entertainment. It trades about 0.06 of its potential returns per unit of risk. Sphere Entertainment Co is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  3,801  in Sphere Entertainment Co on October 18, 2024 and sell it today you would earn a total of  389.00  from holding Sphere Entertainment Co or generate 10.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	31.58%
Values	Daily Returns

ANZNZ 5175122 18 FEB 25  vs.  Sphere Entertainment Co

ANZNZ 5175122 18

Risk-Adjusted Performance

1 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ANZNZ 5175122 18 FEB 25 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ANZNZ is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 latest inconsistent performance, the Stock's technical indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with ANZNZ and Sphere Entertainment

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

The idea behind ANZNZ 5175122 18 FEB 25 and Sphere Entertainment Co 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..