Correlation Between Alpha Technology and Sphere Entertainment
Can any of the company-specific risk be diversified away by investing in both Alpha Technology 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 Alpha Technology and Sphere Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Technology Group and Sphere Entertainment Co, you can compare the effects of market volatilities on Alpha Technology 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 Alpha Technology with a short position of Sphere Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Technology and Sphere Entertainment.
Diversification Opportunities for Alpha Technology and Sphere Entertainment
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alpha and Sphere is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Technology Group and Sphere Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere Entertainment and Alpha Technology 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 Alpha Technology Group 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 Alpha Technology i.e., Alpha Technology and Sphere Entertainment go up and down completely randomly.
Pair Corralation between Alpha Technology and Sphere Entertainment
Given the investment horizon of 90 days Alpha Technology Group is expected to generate 4.02 times more return on investment than Sphere Entertainment. However, Alpha Technology is 4.02 times more volatile than Sphere Entertainment Co. It trades about 0.06 of its potential returns per unit of risk. Sphere Entertainment Co is currently generating about 0.03 per unit of risk. If you would invest 950.00 in Alpha Technology Group on September 12, 2024 and sell it today you would earn a total of 162.00 from holding Alpha Technology Group or generate 17.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alpha Technology Group vs. Sphere Entertainment Co
Performance |
| Timeline |
| Alpha Technology |
| Sphere Entertainment |
Alpha Technology and Sphere Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha Technology and Sphere Entertainment
The main advantage of trading using opposite Alpha Technology and Sphere Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Technology 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.| Alpha Technology vs. Eastman Chemical | Alpha Technology vs. Flexible Solutions International | Alpha Technology vs. Avient Corp | Alpha Technology vs. East Africa Metals |
| Sphere Entertainment vs. Arhaus Inc | Sphere Entertainment vs. Algoma Steel Group | Sphere Entertainment vs. CECO Environmental Corp | Sphere Entertainment vs. The Gap, |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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