Correlation Between Sphere Entertainment and Arhaus
Can any of the company-specific risk be diversified away by investing in both Sphere Entertainment and Arhaus 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 Arhaus 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 Arhaus Inc, you can compare the effects of market volatilities on Sphere Entertainment and Arhaus 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 Arhaus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sphere Entertainment and Arhaus.
Diversification Opportunities for Sphere Entertainment and Arhaus
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sphere and Arhaus is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Arhaus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arhaus Inc 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 Arhaus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arhaus Inc has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Arhaus go up and down completely randomly.
Pair Corralation between Sphere Entertainment and Arhaus
Given the investment horizon of 90 days Sphere Entertainment Co is expected to generate 0.94 times more return on investment than Arhaus. However, Sphere Entertainment Co is 1.07 times less risky than Arhaus. It trades about 0.06 of its potential returns per unit of risk. Arhaus Inc is currently generating about 0.03 per unit of risk. If you would invest 1,927 in Sphere Entertainment Co on September 12, 2024 and sell it today you would earn a total of 1,755 from holding Sphere Entertainment Co or generate 91.07% 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. Arhaus Inc
Performance |
| Timeline |
| Sphere Entertainment |
| Arhaus Inc |
Sphere Entertainment and Arhaus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sphere Entertainment and Arhaus
The main advantage of trading using opposite Sphere Entertainment and Arhaus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sphere Entertainment position performs unexpectedly, Arhaus 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 Arhaus will offset losses from the drop in Arhaus' long position.| Sphere Entertainment vs. Aeye Inc | Sphere Entertainment vs. Ep Emerging Markets | Sphere Entertainment vs. ALPS Emerging Sector | Sphere Entertainment vs. First Physicians Capital |
| Arhaus vs. Victory Integrity Smallmid Cap | Arhaus vs. Hilton Worldwide Holdings | Arhaus vs. NVIDIA | Arhaus vs. JPMorgan Chase 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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