Correlation Between Sphere Entertainment and Oak Woods
Can any of the company-specific risk be diversified away by investing in both Sphere Entertainment and Oak Woods 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 Oak Woods 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 Oak Woods Acquisition, you can compare the effects of market volatilities on Sphere Entertainment and Oak Woods 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 Oak Woods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sphere Entertainment and Oak Woods.
Diversification Opportunities for Sphere Entertainment and Oak Woods
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sphere and Oak is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Oak Woods Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oak Woods Acquisition 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 Oak Woods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oak Woods Acquisition has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Oak Woods go up and down completely randomly.
Pair Corralation between Sphere Entertainment and Oak Woods
Given the investment horizon of 90 days Sphere Entertainment is expected to generate 12.96 times less return on investment than Oak Woods. But when comparing it to its historical volatility, Sphere Entertainment Co is 5.59 times less risky than Oak Woods. It trades about 0.03 of its potential returns per unit of risk. Oak Woods Acquisition is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Oak Woods Acquisition on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Oak Woods Acquisition or generate 0.0% 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. Oak Woods Acquisition
Performance |
| Timeline |
| Sphere Entertainment |
| Oak Woods Acquisition |
Sphere Entertainment and Oak Woods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sphere Entertainment and Oak Woods
The main advantage of trading using opposite Sphere Entertainment and Oak Woods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sphere Entertainment position performs unexpectedly, Oak Woods 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 Oak Woods will offset losses from the drop in Oak Woods' long position.| Sphere Entertainment vs. Liberty Media | Sphere Entertainment vs. Atlanta Braves Holdings, | Sphere Entertainment vs. News Corp B | Sphere Entertainment vs. News Corp A |
| Oak Woods vs. Barings BDC | Oak Woods vs. Franklin Wireless Corp | Oak Woods vs. Skechers USA | Oak Woods vs. Chiba Bank Ltd |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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