Correlation Between Arrow Financial and Sphere Entertainment
Can any of the company-specific risk be diversified away by investing in both Arrow Financial 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 Arrow Financial and Sphere Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Financial and Sphere Entertainment Co, you can compare the effects of market volatilities on Arrow Financial 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 Arrow Financial with a short position of Sphere Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Financial and Sphere Entertainment.
Diversification Opportunities for Arrow Financial and Sphere Entertainment
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arrow and Sphere is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Financial and Sphere Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere Entertainment and Arrow Financial 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 Arrow Financial 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 Arrow Financial i.e., Arrow Financial and Sphere Entertainment go up and down completely randomly.
Pair Corralation between Arrow Financial and Sphere Entertainment
Given the investment horizon of 90 days Arrow Financial is expected to generate 0.77 times more return on investment than Sphere Entertainment. However, Arrow Financial is 1.29 times less risky than Sphere Entertainment. It trades about 0.11 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 2,374 in Arrow Financial on September 12, 2024 and sell it today you would earn a total of 822.00 from holding Arrow Financial or generate 34.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Financial vs. Sphere Entertainment Co
Performance |
| Timeline |
| Arrow Financial |
| Sphere Entertainment |
Arrow Financial and Sphere Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Financial and Sphere Entertainment
The main advantage of trading using opposite Arrow Financial and Sphere Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Financial 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.| Arrow Financial vs. Heritage Commerce Corp | Arrow Financial vs. Westamerica Bancorporation | Arrow Financial vs. Heritage Financial | Arrow Financial vs. National Bankshares |
| Sphere Entertainment vs. Aeye Inc | Sphere Entertainment vs. Ep Emerging Markets | Sphere Entertainment vs. ALPS Emerging Sector | Sphere Entertainment vs. First Physicians Capital |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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