Correlation Between Sphere Entertainment and Liberty Media
Can any of the company-specific risk be diversified away by investing in both Sphere Entertainment and Liberty Media 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 Liberty Media 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 Liberty Media, you can compare the effects of market volatilities on Sphere Entertainment and Liberty Media 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 Liberty Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sphere Entertainment and Liberty Media.
Diversification Opportunities for Sphere Entertainment and Liberty Media
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sphere and Liberty is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Liberty Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media 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 Liberty Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Media has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Liberty Media go up and down completely randomly.
Pair Corralation between Sphere Entertainment and Liberty Media
Given the investment horizon of 90 days Sphere Entertainment Co is expected to generate 1.87 times more return on investment than Liberty Media. However, Sphere Entertainment is 1.87 times more volatile than Liberty Media. It trades about 0.34 of its potential returns per unit of risk. Liberty Media is currently generating about 0.16 per unit of risk. If you would invest 4,032 in Sphere Entertainment Co on November 1, 2024 and sell it today you would earn a total of 564.00 from holding Sphere Entertainment Co or generate 13.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Sphere Entertainment Co vs. Liberty Media
Performance |
| Timeline |
| Sphere Entertainment |
| Liberty Media |
Sphere Entertainment and Liberty Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sphere Entertainment and Liberty Media
The main advantage of trading using opposite Sphere Entertainment and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sphere Entertainment position performs unexpectedly, Liberty Media 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 Liberty Media will offset losses from the drop in Liberty Media's long position.| Sphere Entertainment vs. ServiceNow | Sphere Entertainment vs. Rocky Brands | Sphere Entertainment vs. Office Properties Income | Sphere Entertainment vs. Precision Optics, |
| Liberty Media vs. Atlanta Braves Holdings, | Liberty Media vs. News Corp B | Liberty Media vs. News Corp A | Liberty Media vs. Atlanta Braves 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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