Correlation Between Naked Wines and Sphere Entertainment
Can any of the company-specific risk be diversified away by investing in both Naked Wines 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 Naked Wines and Sphere Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naked Wines plc and Sphere Entertainment Co, you can compare the effects of market volatilities on Naked Wines 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 Naked Wines with a short position of Sphere Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naked Wines and Sphere Entertainment.
Diversification Opportunities for Naked Wines and Sphere Entertainment
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Naked and Sphere is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Naked Wines plc and Sphere Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere Entertainment and Naked Wines 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 Naked Wines plc 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 Naked Wines i.e., Naked Wines and Sphere Entertainment go up and down completely randomly.
Pair Corralation between Naked Wines and Sphere Entertainment
Assuming the 90 days horizon Naked Wines plc is expected to under-perform the Sphere Entertainment. In addition to that, Naked Wines is 2.38 times more volatile than Sphere Entertainment Co. It trades about -0.22 of its total potential returns per unit of risk. Sphere Entertainment Co is currently generating about 0.28 per unit of volatility. If you would invest 4,151 in Sphere Entertainment Co on November 2, 2024 and sell it today you would earn a total of 466.00 from holding Sphere Entertainment Co or generate 11.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Naked Wines plc vs. Sphere Entertainment Co
Performance |
| Timeline |
| Naked Wines plc |
| Sphere Entertainment |
Naked Wines and Sphere Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naked Wines and Sphere Entertainment
The main advantage of trading using opposite Naked Wines and Sphere Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naked Wines 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.| Naked Wines vs. Pernod Ricard SA | Naked Wines vs. Naked Wines plc | Naked Wines vs. Crimson Wine | Naked Wines vs. Brown Forman |
| Sphere Entertainment vs. Lifeway Foods | Sphere Entertainment vs. Keurig Dr Pepper | Sphere Entertainment vs. National Waste Management | Sphere Entertainment vs. WK Kellogg Co |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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