Correlation Between Sphere Entertainment and Minerals Technologies

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

Diversification Opportunities for Sphere Entertainment and Minerals Technologies

-0.23

Correlation Coefficient

Sphere Entertainment  Minerals Technologies

Very good diversification

The 3 months correlation between Sphere and Minerals is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Minerals Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerals Technologies 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 Minerals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerals Technologies has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Minerals Technologies go up and down completely randomly.

Pair Corralation between Sphere Entertainment and Minerals Technologies

Given the investment horizon of 90 days Sphere Entertainment Co is expected to under-perform the Minerals Technologies. In addition to that, Sphere Entertainment is 1.39 times more volatile than Minerals Technologies. It trades about -0.05 of its total potential returns per unit of risk. Minerals Technologies is currently generating about 0.04 per unit of volatility. If you would invest  7,295  in Minerals Technologies on September 20, 2024 and sell it today you would earn a total of  296.00  from holding Minerals Technologies or generate 4.06% 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.  Minerals Technologies

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 uncertain 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.

Minerals Technologies

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Minerals Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Minerals Technologies 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 Minerals Technologies

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

The idea behind Sphere Entertainment Co and Minerals Technologies 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.