Correlation Between 00751YAG1 and Sphere Entertainment

Can any of the company-specific risk be diversified away by investing in both 00751YAG1 and Sphere Entertainment 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 00751YAG1 and Sphere Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AAP 35 15 MAR 32 and Sphere Entertainment Co, you can compare the effects of market volatilities on 00751YAG1 and Sphere Entertainment 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 00751YAG1 with a short position of Sphere Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00751YAG1 and Sphere Entertainment.

Diversification Opportunities for 00751YAG1 and Sphere Entertainment

-0.01

Correlation Coefficient

00751YAG1  Sphere Entertainment

Good diversification

The 3 months correlation between 00751YAG1 and Sphere is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding AAP 35 15 MAR 32 and Sphere Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere Entertainment and 00751YAG1 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 AAP 35 15 MAR 32 are associated (or correlated) with Sphere Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sphere Entertainment has no effect on the direction of 00751YAG1 i.e., 00751YAG1 and Sphere Entertainment go up and down completely randomly.

Pair Corralation between 00751YAG1 and Sphere Entertainment

Assuming the 90 days trading horizon AAP 35 15 MAR 32 is expected to under-perform the Sphere Entertainment. But the bond apears to be less risky and, when comparing its historical volatility, AAP 35 15 MAR 32 is 2.2 times less risky than Sphere Entertainment. The bond trades about -0.13 of its potential returns per unit of risk. The Sphere Entertainment Co is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  4,223  in Sphere Entertainment Co on September 13, 2024 and sell it today you would lose (444.00) from holding Sphere Entertainment Co or give up 10.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

AAP 35 15 MAR 32  vs.  Sphere Entertainment Co

AAP 35 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AAP 35 15 MAR 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for AAP 35 15 MAR 32 investors.

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.

Pair Trading with 00751YAG1 and Sphere Entertainment

The main advantage of trading using opposite 00751YAG1 and Sphere Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00751YAG1 position performs unexpectedly, Sphere Entertainment 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 Sphere Entertainment will offset losses from the drop in Sphere Entertainment's long position.

The idea behind AAP 35 15 MAR 32 and Sphere Entertainment Co 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.