Correlation Between Sphere Entertainment and Liberty Braves

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

Diversification Opportunities for Sphere Entertainment and Liberty Braves

-0.02

Correlation Coefficient

Sphere Entertainment  Liberty Braves

Good diversification

The 3 months correlation between Sphere and Liberty is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and The Liberty Braves in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Braves 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 Liberty Braves. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Braves has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Liberty Braves go up and down completely randomly.

Pair Corralation between Sphere Entertainment and Liberty Braves

If you would invest  4,700  in The Liberty Braves on September 1, 2024 and sell it today you would earn a total of  0.00  from holding The Liberty Braves or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Sphere Entertainment Co  vs.  The Liberty Braves

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.

Liberty Braves

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Liberty Braves has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Liberty Braves 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 Liberty Braves

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

The idea behind Sphere Entertainment Co and The Liberty Braves 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.