Correlation Between Sphere Entertainment and BrightSpring Health
Can any of the company-specific risk be diversified away by investing in both Sphere Entertainment and BrightSpring Health 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 BrightSpring Health 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 BrightSpring Health Services,, you can compare the effects of market volatilities on Sphere Entertainment and BrightSpring Health 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 BrightSpring Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sphere Entertainment and BrightSpring Health.
Diversification Opportunities for Sphere Entertainment and BrightSpring Health
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sphere and BrightSpring is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and BrightSpring Health Services, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BrightSpring Health 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 BrightSpring Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BrightSpring Health has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and BrightSpring Health go up and down completely randomly.
Pair Corralation between Sphere Entertainment and BrightSpring Health
Given the investment horizon of 90 days Sphere Entertainment is expected to generate 1.1 times less return on investment than BrightSpring Health. In addition to that, Sphere Entertainment is 1.56 times more volatile than BrightSpring Health Services,. It trades about 0.06 of its total potential returns per unit of risk. BrightSpring Health Services, is currently generating about 0.1 per unit of volatility. If you would invest 4,351 in BrightSpring Health Services, on September 14, 2024 and sell it today you would earn a total of 2,208 from holding BrightSpring Health Services, or generate 50.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 45.34% |
| Values | Daily Returns |
Sphere Entertainment Co vs. BrightSpring Health Services,
Performance |
| Timeline |
| Sphere Entertainment |
| BrightSpring Health |
Sphere Entertainment and BrightSpring Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sphere Entertainment and BrightSpring Health
The main advantage of trading using opposite Sphere Entertainment and BrightSpring Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sphere Entertainment position performs unexpectedly, BrightSpring Health 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 BrightSpring Health will offset losses from the drop in BrightSpring Health's long position.| Sphere Entertainment vs. Liberty Media | Sphere Entertainment vs. Atlanta Braves Holdings, | Sphere Entertainment vs. News Corp B | Sphere Entertainment vs. News Corp A |
| BrightSpring Health vs. WiMi Hologram Cloud | BrightSpring Health vs. Brunswick | BrightSpring Health vs. Sphere Entertainment Co | BrightSpring Health vs. Skechers USA |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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