Correlation Between Sphere Entertainment and Shoprite Holdings
Can any of the company-specific risk be diversified away by investing in both Sphere Entertainment and Shoprite Holdings 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 Shoprite Holdings 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 Shoprite Holdings Limited, you can compare the effects of market volatilities on Sphere Entertainment and Shoprite Holdings 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 Shoprite Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sphere Entertainment and Shoprite Holdings.
Diversification Opportunities for Sphere Entertainment and Shoprite Holdings
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sphere and Shoprite is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Shoprite Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoprite Holdings 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 Shoprite Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoprite Holdings has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Shoprite Holdings go up and down completely randomly.
Pair Corralation between Sphere Entertainment and Shoprite Holdings
Given the investment horizon of 90 days Sphere Entertainment Co is expected to under-perform the Shoprite Holdings. In addition to that, Sphere Entertainment is 6.04 times more volatile than Shoprite Holdings Limited. It trades about -0.02 of its total potential returns per unit of risk. Shoprite Holdings Limited is currently generating about 0.27 per unit of volatility. If you would invest 1,607 in Shoprite Holdings Limited on September 23, 2024 and sell it today you would earn a total of 26.00 from holding Shoprite Holdings Limited or generate 1.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 21.54% |
Values | Daily Returns |
Sphere Entertainment Co vs. Shoprite Holdings Limited
Performance |
Timeline |
Sphere Entertainment |
Shoprite Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Sphere Entertainment and Shoprite Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sphere Entertainment and Shoprite Holdings
The main advantage of trading using opposite Sphere Entertainment and Shoprite Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sphere Entertainment position performs unexpectedly, Shoprite Holdings 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 Shoprite Holdings will offset losses from the drop in Shoprite Holdings' long position.Sphere Entertainment vs. Warner Bros Discovery | Sphere Entertainment vs. Paramount Global Class | Sphere Entertainment vs. Live Nation Entertainment | Sphere Entertainment vs. iQIYI Inc |
Shoprite Holdings vs. Sphere Entertainment Co | Shoprite Holdings vs. Huadi International Group | Shoprite Holdings vs. EvoAir Holdings | Shoprite Holdings vs. Osaka Steel Co, |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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