Correlation Between Sphere Entertainment and Universal Display
Can any of the company-specific risk be diversified away by investing in both Sphere Entertainment and Universal Display 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 Universal Display 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 Universal Display, you can compare the effects of market volatilities on Sphere Entertainment and Universal Display 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 Universal Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sphere Entertainment and Universal Display.
Diversification Opportunities for Sphere Entertainment and Universal Display
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sphere and Universal is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Universal Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Display 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 Universal Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Display has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Universal Display go up and down completely randomly.
Pair Corralation between Sphere Entertainment and Universal Display
Given the investment horizon of 90 days Sphere Entertainment Co is expected to generate 1.11 times more return on investment than Universal Display. However, Sphere Entertainment is 1.11 times more volatile than Universal Display. It trades about 0.05 of its potential returns per unit of risk. Universal Display is currently generating about 0.0 per unit of risk. If you would invest 3,204 in Sphere Entertainment Co on September 2, 2024 and sell it today you would earn a total of 911.00 from holding Sphere Entertainment Co or generate 28.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sphere Entertainment Co vs. Universal Display
Performance |
| Timeline |
| Sphere Entertainment |
| Universal Display |
Sphere Entertainment and Universal Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sphere Entertainment and Universal Display
The main advantage of trading using opposite Sphere Entertainment and Universal Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sphere Entertainment position performs unexpectedly, Universal Display 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 Universal Display will offset losses from the drop in Universal Display's long position.| Sphere Entertainment vs. Zane Interactive Publishing | Sphere Entertainment vs. Sable Offshore Corp | Sphere Entertainment vs. AMREP | Sphere Entertainment vs. Coursera |
| Universal Display vs. Plexus Corp | Universal Display vs. Methode Electronics | Universal Display vs. Benchmark Electronics | Universal Display vs. Bel Fuse A |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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