Correlation Between Sphere Entertainment and Western Asset
Can any of the company-specific risk be diversified away by investing in both Sphere Entertainment and Western Asset 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 Western Asset 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 Western Asset Investment, you can compare the effects of market volatilities on Sphere Entertainment and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sphere Entertainment and Western Asset.
Diversification Opportunities for Sphere Entertainment and Western Asset
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sphere and Western is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Western Asset Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Investment 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Investment has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Western Asset go up and down completely randomly.
Pair Corralation between Sphere Entertainment and Western Asset
Given the investment horizon of 90 days Sphere Entertainment Co is expected to generate 5.16 times more return on investment than Western Asset. However, Sphere Entertainment is 5.16 times more volatile than Western Asset Investment. It trades about 0.05 of its potential returns per unit of risk. Western Asset Investment is currently generating about 0.04 per unit of risk. If you would invest 3,197 in Sphere Entertainment Co on September 4, 2024 and sell it today you would earn a total of 858.00 from holding Sphere Entertainment Co or generate 26.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sphere Entertainment Co vs. Western Asset Investment
Performance |
| Timeline |
| Sphere Entertainment |
| Western Asset Investment |
Sphere Entertainment and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sphere Entertainment and Western Asset
The main advantage of trading using opposite Sphere Entertainment and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sphere Entertainment position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Sphere Entertainment vs. Dine Brands Global | Sphere Entertainment vs. NextNav Warrant | Sphere Entertainment vs. Rave Restaurant Group | Sphere Entertainment vs. Datadog |
| Western Asset vs. Pioneer Floating Rate | Western Asset vs. The Gabelli Equity | Western Asset vs. Pioneer Municipal High | Western Asset vs. Nuveen Global High |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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