Correlation Between SVELEV and Sphere Entertainment

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

By analyzing existing cross correlation between SVELEV 28 10 FEB 51 and Sphere Entertainment Co, you can compare the effects of market volatilities on SVELEV 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 SVELEV with a short position of Sphere Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SVELEV and Sphere Entertainment.

Diversification Opportunities for SVELEV and Sphere Entertainment

0.48

Correlation Coefficient

SVELEV  Sphere Entertainment

Very weak diversification

The 3 months correlation between SVELEV and Sphere is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding SVELEV 28 10 FEB 51 and Sphere Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere Entertainment and SVELEV 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 SVELEV 28 10 FEB 51 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 SVELEV i.e., SVELEV and Sphere Entertainment go up and down completely randomly.

Pair Corralation between SVELEV and Sphere Entertainment

Assuming the 90 days trading horizon SVELEV 28 10 FEB 51 is expected to generate 0.39 times more return on investment than Sphere Entertainment. However, SVELEV 28 10 FEB 51 is 2.55 times less risky than Sphere Entertainment. It trades about -0.04 of its potential returns per unit of risk. Sphere Entertainment Co is currently generating about -0.04 per unit of risk. If you would invest  6,508  in SVELEV 28 10 FEB 51 on September 16, 2024 and sell it today you would lose (168.00) from holding SVELEV 28 10 FEB 51 or give up 2.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	84.62%
Values	Daily Returns

SVELEV 28 10 FEB 51  vs.  Sphere Entertainment Co

SVELEV 28 10

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SVELEV 28 10 FEB 51 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SVELEV 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 conflicting 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 SVELEV and Sphere Entertainment

The main advantage of trading using opposite SVELEV and Sphere Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SVELEV 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 SVELEV 28 10 FEB 51 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.