Correlation Between Sphere Entertainment and Alaska Air
Can any of the company-specific risk be diversified away by investing in both Sphere Entertainment and Alaska Air 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 Sphere Entertainment and Alaska Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sphere Entertainment Co and Alaska Air Group, you can compare the effects of market volatilities on Sphere Entertainment and Alaska Air 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 Sphere Entertainment with a short position of Alaska Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sphere Entertainment and Alaska Air.
Diversification Opportunities for Sphere Entertainment and Alaska Air
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sphere and Alaska is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Alaska Air Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alaska Air Group and Sphere Entertainment 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 Sphere Entertainment Co are associated (or correlated) with Alaska Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alaska Air Group has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Alaska Air go up and down completely randomly.
Pair Corralation between Sphere Entertainment and Alaska Air
Given the investment horizon of 90 days Sphere Entertainment is expected to generate 1.3 times less return on investment than Alaska Air. In addition to that, Sphere Entertainment is 1.39 times more volatile than Alaska Air Group. It trades about 0.05 of its total potential returns per unit of risk. Alaska Air Group is currently generating about 0.09 per unit of volatility. If you would invest 3,575 in Alaska Air Group on September 4, 2024 and sell it today you would earn a total of 1,680 from holding Alaska Air Group or generate 46.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sphere Entertainment Co vs. Alaska Air Group
Performance |
| Timeline |
| Sphere Entertainment |
| Alaska Air Group |
Sphere Entertainment and Alaska Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sphere Entertainment and Alaska Air
The main advantage of trading using opposite Sphere Entertainment and Alaska Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sphere Entertainment position performs unexpectedly, Alaska Air 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 Alaska Air will offset losses from the drop in Alaska Air's long position.| Sphere Entertainment vs. Dine Brands Global | Sphere Entertainment vs. NextNav Warrant | Sphere Entertainment vs. Rave Restaurant Group | Sphere Entertainment vs. Datadog |
| Alaska Air vs. Delta Air Lines | Alaska Air vs. United Airlines Holdings | Alaska Air vs. Frontier Group Holdings |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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