Correlation Between Sphere Entertainment and Global E

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

Diversification Opportunities for Sphere Entertainment and Global E

-0.82

Correlation Coefficient

Sphere Entertainment  Global E

Pay attention - limited upside

The 3 months correlation between Sphere and Global is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Global E Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global E Online 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 Global E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global E Online has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Global E go up and down completely randomly.

Pair Corralation between Sphere Entertainment and Global E

Given the investment horizon of 90 days Sphere Entertainment is expected to generate 3.47 times less return on investment than Global E. In addition to that, Sphere Entertainment is 1.23 times more volatile than Global E Online. It trades about 0.04 of its total potential returns per unit of risk. Global E Online is currently generating about 0.15 per unit of volatility. If you would invest  3,627  in Global E Online on September 26, 2024 and sell it today you would earn a total of  1,888  from holding Global E Online or generate 52.05% return on investment over 90 days.

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

Sphere Entertainment Co  vs.  Global E Online

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 unsteady 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.

Global E Online

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global E Online are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental drivers, Global E exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sphere Entertainment and Global E

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

The idea behind Sphere Entertainment Co and Global E Online 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.

Check out your portfolio center.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.