Correlation Between Sphere Entertainment and HNI Corp

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

Diversification Opportunities for Sphere Entertainment and HNI Corp

-0.32

Correlation Coefficient

Sphere Entertainment  HNI Corp

Very good diversification

The 3 months correlation between Sphere and HNI is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and HNI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corp 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 HNI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNI Corp has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and HNI Corp go up and down completely randomly.

Pair Corralation between Sphere Entertainment and HNI Corp

Given the investment horizon of 90 days Sphere Entertainment Co is expected to under-perform the HNI Corp. In addition to that, Sphere Entertainment is 1.79 times more volatile than HNI Corp. It trades about -0.04 of its total potential returns per unit of risk. HNI Corp is currently generating about 0.04 per unit of volatility. If you would invest  5,186  in HNI Corp on September 15, 2024 and sell it today you would earn a total of  191.00  from holding HNI Corp or generate 3.68% 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.  HNI Corp

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 fragile 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.

HNI Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HNI Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, HNI Corp is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Sphere Entertainment and HNI Corp

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

The idea behind Sphere Entertainment Co and HNI Corp 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .