Correlation Between Sphere Entertainment and CAVA Group,
Can any of the company-specific risk be diversified away by investing in both Sphere Entertainment and CAVA Group, 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 CAVA Group, 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 CAVA Group,, you can compare the effects of market volatilities on Sphere Entertainment and CAVA Group, 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 CAVA Group,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sphere Entertainment and CAVA Group,.
Diversification Opportunities for Sphere Entertainment and CAVA Group,
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sphere and CAVA is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and CAVA Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAVA 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 CAVA Group,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAVA Group, has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and CAVA Group, go up and down completely randomly.
Pair Corralation between Sphere Entertainment and CAVA Group,
Given the investment horizon of 90 days Sphere Entertainment is expected to generate 3.74 times less return on investment than CAVA Group,. But when comparing it to its historical volatility, Sphere Entertainment Co is 1.04 times less risky than CAVA Group,. It trades about 0.04 of its potential returns per unit of risk. CAVA Group, is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 8,800 in CAVA Group, on September 1, 2024 and sell it today you would earn a total of 5,290 from holding CAVA Group, or generate 60.11% 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. CAVA Group,
Performance |
| Timeline |
| Sphere Entertainment |
| CAVA Group, |
Sphere Entertainment and CAVA Group, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sphere Entertainment and CAVA Group,
The main advantage of trading using opposite Sphere Entertainment and CAVA Group, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sphere Entertainment position performs unexpectedly, CAVA Group, 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 CAVA Group, will offset losses from the drop in CAVA Group,'s long position.| Sphere Entertainment vs. JD Sports Fashion | Sphere Entertainment vs. Sun Country Airlines | Sphere Entertainment vs. SFL Corporation | Sphere Entertainment vs. Sabre Corpo |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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