Correlation Between Sphere Entertainment and Banc Of

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

Diversification Opportunities for Sphere Entertainment and Banc Of

-0.78

Correlation Coefficient

Sphere Entertainment  Banc Of

Pay attention - limited upside

The 3 months correlation between Sphere and Banc is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Banc of California in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banc of California 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 Banc Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banc of California has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Banc Of go up and down completely randomly.

Pair Corralation between Sphere Entertainment and Banc Of

Given the investment horizon of 90 days Sphere Entertainment Co is expected to under-perform the Banc Of. In addition to that, Sphere Entertainment is 4.58 times more volatile than Banc of California. It trades about -0.04 of its total potential returns per unit of risk. Banc of California is currently generating about 0.09 per unit of volatility. If you would invest  2,379  in Banc of California on September 16, 2024 and sell it today you would earn a total of  84.00  from holding Banc of California or generate 3.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Sphere Entertainment Co  vs.  Banc of California

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 conflicting 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.

Banc of California

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Banc of California are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Banc Of is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sphere Entertainment and Banc Of

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

The idea behind Sphere Entertainment Co and Banc of California 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.