Correlation Between Lees Pharmaceutical and Sphere Entertainment
Can any of the company-specific risk be diversified away by investing in both Lees Pharmaceutical 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 Lees Pharmaceutical and Sphere Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lees Pharmaceutical Holdings and Sphere Entertainment Co, you can compare the effects of market volatilities on Lees Pharmaceutical 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 Lees Pharmaceutical with a short position of Sphere Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lees Pharmaceutical and Sphere Entertainment.
Diversification Opportunities for Lees Pharmaceutical and Sphere Entertainment
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lees and Sphere is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Lees Pharmaceutical Holdings and Sphere Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere Entertainment and Lees Pharmaceutical 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 Lees Pharmaceutical Holdings 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 Lees Pharmaceutical i.e., Lees Pharmaceutical and Sphere Entertainment go up and down completely randomly.
Pair Corralation between Lees Pharmaceutical and Sphere Entertainment
Assuming the 90 days horizon Lees Pharmaceutical Holdings is expected to under-perform the Sphere Entertainment. In addition to that, Lees Pharmaceutical is 25.18 times more volatile than Sphere Entertainment Co. It trades about -0.09 of its total potential returns per unit of risk. Sphere Entertainment Co is currently generating about 0.06 per unit of volatility. If you would invest 1,862 in Sphere Entertainment Co on September 1, 2024 and sell it today you would earn a total of 2,253 from holding Sphere Entertainment Co or generate 121.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 29.09% |
| Values | Daily Returns |
Lees Pharmaceutical Holdings vs. Sphere Entertainment Co
Performance |
| Timeline |
| Lees Pharmaceutical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sphere Entertainment |
Lees Pharmaceutical and Sphere Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lees Pharmaceutical and Sphere Entertainment
The main advantage of trading using opposite Lees Pharmaceutical and Sphere Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lees Pharmaceutical 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.| Lees Pharmaceutical vs. Brunswick | Lees Pharmaceutical vs. Freedom Internet Group | Lees Pharmaceutical vs. Reservoir Media | Lees Pharmaceutical vs. Sphere Entertainment Co |
| Sphere Entertainment vs. JD Sports Fashion | Sphere Entertainment vs. Sun Country Airlines | Sphere Entertainment vs. SFL Corporation | Sphere Entertainment vs. Sabre Corpo |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |