Correlation Between Sphere Entertainment and Getty Realty

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

Diversification Opportunities for Sphere Entertainment and Getty Realty

-0.33

Correlation Coefficient

Sphere Entertainment  Getty Realty

Very good diversification

The 3 months correlation between Sphere and Getty is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Getty Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Realty 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 Getty Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Realty has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Getty Realty go up and down completely randomly.

Pair Corralation between Sphere Entertainment and Getty Realty

Given the investment horizon of 90 days Sphere Entertainment Co is expected to generate 2.62 times more return on investment than Getty Realty. However, Sphere Entertainment is 2.62 times more volatile than Getty Realty. It trades about 0.06 of its potential returns per unit of risk. Getty Realty is currently generating about 0.01 per unit of risk. If you would invest  1,927  in Sphere Entertainment Co on September 12, 2024 and sell it today you would earn a total of  1,755  from holding Sphere Entertainment Co or generate 91.07% return on investment over 90 days.

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

Sphere Entertainment Co  vs.  Getty Realty

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 weak 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.

Getty Realty

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Getty Realty are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Getty Realty 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 Getty Realty

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

The idea behind Sphere Entertainment Co and Getty Realty 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.