Correlation Between Acco Brands and Sphere Entertainment
Can any of the company-specific risk be diversified away by investing in both Acco Brands 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 Acco Brands and Sphere Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acco Brands and Sphere Entertainment Co, you can compare the effects of market volatilities on Acco Brands 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 Acco Brands with a short position of Sphere Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acco Brands and Sphere Entertainment.
Diversification Opportunities for Acco Brands and Sphere Entertainment
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Acco and Sphere is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and Sphere Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere Entertainment and Acco Brands 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 Acco Brands 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 Acco Brands i.e., Acco Brands and Sphere Entertainment go up and down completely randomly.
Pair Corralation between Acco Brands and Sphere Entertainment
Given the investment horizon of 90 days Acco Brands is expected to generate 1.39 times less return on investment than Sphere Entertainment. But when comparing it to its historical volatility, Acco Brands is 1.44 times less risky than Sphere Entertainment. It trades about 0.05 of its potential returns per unit of risk. Sphere Entertainment Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,137 in Sphere Entertainment Co on August 25, 2024 and sell it today you would earn a total of 892.00 from holding Sphere Entertainment Co or generate 28.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acco Brands vs. Sphere Entertainment Co
Performance |
| Timeline |
| Acco Brands |
| Sphere Entertainment |
Acco Brands and Sphere Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acco Brands and Sphere Entertainment
The main advantage of trading using opposite Acco Brands and Sphere Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acco Brands 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.| Acco Brands vs. Park Electrochemical | Acco Brands vs. Innovative Solutions and | Acco Brands vs. Curtiss Wright | Acco Brands vs. National Presto Industries |
| Sphere Entertainment vs. Toro Co | Sphere Entertainment vs. Aerofoam Metals | Sphere Entertainment vs. Eastern Co | Sphere Entertainment vs. Acco Brands |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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