Correlation Between Sphere Entertainment and Alpha Technology
Can any of the company-specific risk be diversified away by investing in both Sphere Entertainment and Alpha Technology 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 Alpha Technology 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 Alpha Technology Group, you can compare the effects of market volatilities on Sphere Entertainment and Alpha Technology 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 Alpha Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sphere Entertainment and Alpha Technology.
Diversification Opportunities for Sphere Entertainment and Alpha Technology
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sphere and Alpha is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Alpha Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Technology 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 Alpha Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Technology has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Alpha Technology go up and down completely randomly.
Pair Corralation between Sphere Entertainment and Alpha Technology
Given the investment horizon of 90 days Sphere Entertainment Co is expected to under-perform the Alpha Technology. But the stock apears to be less risky and, when comparing its historical volatility, Sphere Entertainment Co is 5.46 times less risky than Alpha Technology. The stock trades about -0.14 of its potential returns per unit of risk. The Alpha Technology Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 933.00 in Alpha Technology Group on September 13, 2024 and sell it today you would earn a total of 270.00 from holding Alpha Technology Group or generate 28.94% 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. Alpha Technology Group
Performance |
| Timeline |
| Sphere Entertainment |
| Alpha Technology |
Sphere Entertainment and Alpha Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sphere Entertainment and Alpha Technology
The main advantage of trading using opposite Sphere Entertainment and Alpha Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sphere Entertainment position performs unexpectedly, Alpha Technology 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 Alpha Technology will offset losses from the drop in Alpha Technology's long position.| Sphere Entertainment vs. Arhaus Inc | Sphere Entertainment vs. Algoma Steel Group | Sphere Entertainment vs. CECO Environmental Corp | Sphere Entertainment vs. The Gap, |
| Alpha Technology vs. Eastman Chemical | Alpha Technology vs. Flexible Solutions International | Alpha Technology vs. Avient Corp | Alpha Technology vs. East Africa Metals |
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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