Correlation Between Sphere Entertainment and Life Time
Can any of the company-specific risk be diversified away by investing in both Sphere Entertainment and Life Time 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 Life Time 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 Life Time Group, you can compare the effects of market volatilities on Sphere Entertainment and Life Time 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 Life Time. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sphere Entertainment and Life Time.
Diversification Opportunities for Sphere Entertainment and Life Time
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sphere and Life is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Life Time Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Time 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 Life Time. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Time Group has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Life Time go up and down completely randomly.
Pair Corralation between Sphere Entertainment and Life Time
Given the investment horizon of 90 days Sphere Entertainment Co is expected to under-perform the Life Time. In addition to that, Sphere Entertainment is 1.35 times more volatile than Life Time Group. It trades about -0.14 of its total potential returns per unit of risk. Life Time Group is currently generating about 0.19 per unit of volatility. If you would invest 2,887 in Life Time Group on November 28, 2024 and sell it today you would earn a total of 200.00 from holding Life Time Group or generate 6.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sphere Entertainment Co vs. Life Time Group
Performance |
| Timeline |
| Sphere Entertainment |
| Life Time Group |
Sphere Entertainment and Life Time Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sphere Entertainment and Life Time
The main advantage of trading using opposite Sphere Entertainment and Life Time positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sphere Entertainment position performs unexpectedly, Life Time 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 Life Time will offset losses from the drop in Life Time's long position.| Sphere Entertainment vs. PennantPark Floating Rate | Sphere Entertainment vs. Cedar Realty Trust | Sphere Entertainment vs. Aldel Financial II | Sphere Entertainment vs. PepsiCo |
| Life Time vs. Chipotle Mexican Grill | Life Time vs. Dominos Pizza Common | Life Time vs. Yum Brands | Life Time vs. The Wendys Co |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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