Correlation Between Fidelity and Sphere Entertainment

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

By analyzing existing cross correlation between Fidelity Guaranty Life and Sphere Entertainment Co, you can compare the effects of market volatilities on Fidelity 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 Fidelity with a short position of Sphere Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity and Sphere Entertainment.

Diversification Opportunities for Fidelity and Sphere Entertainment

-0.04

Correlation Coefficient

Fidelity  Sphere Entertainment

Good diversification

The 3 months correlation between Fidelity and Sphere is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Guaranty Life and Sphere Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere Entertainment and Fidelity 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 Fidelity Guaranty Life 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 Fidelity i.e., Fidelity and Sphere Entertainment go up and down completely randomly.

Pair Corralation between Fidelity and Sphere Entertainment

Assuming the 90 days trading horizon Fidelity Guaranty Life is expected to generate 0.42 times more return on investment than Sphere Entertainment. However, Fidelity Guaranty Life is 2.37 times less risky than Sphere Entertainment. It trades about 0.0 of its potential returns per unit of risk. Sphere Entertainment Co is currently generating about -0.05 per unit of risk. If you would invest  9,974  in Fidelity Guaranty Life on September 12, 2024 and sell it today you would lose (19.00) from holding Fidelity Guaranty Life or give up 0.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	26.56%
Values	Daily Returns

Fidelity Guaranty Life  vs.  Sphere Entertainment Co

Fidelity Guaranty Life

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Guaranty Life has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Fidelity is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the 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 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.

Pair Trading with Fidelity and Sphere Entertainment

The main advantage of trading using opposite Fidelity and Sphere Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity 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 Fidelity Guaranty Life 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.