Correlation Between Delta Air and Sphere Entertainment
Can any of the company-specific risk be diversified away by investing in both Delta Air 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 Delta Air and Sphere Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Air Lines and Sphere Entertainment Co, you can compare the effects of market volatilities on Delta Air 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 Delta Air with a short position of Sphere Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Sphere Entertainment.
Diversification Opportunities for Delta Air and Sphere Entertainment
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Delta and Sphere is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Sphere Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere Entertainment and Delta Air 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 Delta Air Lines 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 Delta Air i.e., Delta Air and Sphere Entertainment go up and down completely randomly.
Pair Corralation between Delta Air and Sphere Entertainment
Considering the 90-day investment horizon Delta Air is expected to generate 1.16 times less return on investment than Sphere Entertainment. But when comparing it to its historical volatility, Delta Air Lines is 1.65 times less risky than Sphere Entertainment. It trades about 0.08 of its potential returns per unit of risk. Sphere Entertainment Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,559 in Sphere Entertainment Co on August 31, 2024 and sell it today you would earn a total of 1,556 from holding Sphere Entertainment Co or generate 60.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Air Lines vs. Sphere Entertainment Co
Performance |
| Timeline |
| Delta Air Lines |
| Sphere Entertainment |
Delta Air and Sphere Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Sphere Entertainment
The main advantage of trading using opposite Delta Air and Sphere Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air 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.| Delta Air vs. JetBlue Airways Corp | Delta Air vs. Allegiant Travel | Delta Air vs. SkyWest | Delta Air vs. Air Transport Services |
| Sphere Entertainment vs. Ihuman Inc | Sphere Entertainment vs. GoHealth | Sphere Entertainment vs. Aspen Insurance Holdings | Sphere Entertainment vs. Relx PLC ADR |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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