Correlation Between Sphere Entertainment and Mativ Holdings
Can any of the company-specific risk be diversified away by investing in both Sphere Entertainment and Mativ Holdings 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 Mativ Holdings 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 Mativ Holdings, you can compare the effects of market volatilities on Sphere Entertainment and Mativ Holdings 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 Mativ Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sphere Entertainment and Mativ Holdings.
Diversification Opportunities for Sphere Entertainment and Mativ Holdings
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sphere and Mativ is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Mativ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mativ Holdings 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 Mativ Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mativ Holdings has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Mativ Holdings go up and down completely randomly.
Pair Corralation between Sphere Entertainment and Mativ Holdings
Given the investment horizon of 90 days Sphere Entertainment Co is expected to generate 0.42 times more return on investment than Mativ Holdings. However, Sphere Entertainment Co is 2.41 times less risky than Mativ Holdings. It trades about -0.16 of its potential returns per unit of risk. Mativ Holdings is currently generating about -0.08 per unit of risk. If you would invest 4,477 in Sphere Entertainment Co on August 28, 2024 and sell it today you would lose (367.00) from holding Sphere Entertainment Co or give up 8.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sphere Entertainment Co vs. Mativ Holdings
Performance |
| Timeline |
| Sphere Entertainment |
| Mativ Holdings |
Sphere Entertainment and Mativ Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sphere Entertainment and Mativ Holdings
The main advantage of trading using opposite Sphere Entertainment and Mativ Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sphere Entertainment position performs unexpectedly, Mativ Holdings 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 Mativ Holdings will offset losses from the drop in Mativ Holdings' long position.| Sphere Entertainment vs. Tandem Diabetes Care | Sphere Entertainment vs. Weyco Group | Sphere Entertainment vs. Viemed Healthcare | Sphere Entertainment vs. Amgen Inc |
| Mativ Holdings vs. Orion Engineered Carbons | Mativ Holdings vs. Select Energy Services | Mativ Holdings vs. Perimeter Solutions SA | Mativ Holdings vs. FutureFuel Corp |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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