Correlation Between Sphere Entertainment and Socket Mobile
Can any of the company-specific risk be diversified away by investing in both Sphere Entertainment and Socket Mobile 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 Socket Mobile 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 Socket Mobile, you can compare the effects of market volatilities on Sphere Entertainment and Socket Mobile 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 Socket Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sphere Entertainment and Socket Mobile.
Diversification Opportunities for Sphere Entertainment and Socket Mobile
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sphere and Socket is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Socket Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socket Mobile 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 Socket Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socket Mobile has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Socket Mobile go up and down completely randomly.
Pair Corralation between Sphere Entertainment and Socket Mobile
Given the investment horizon of 90 days Sphere Entertainment Co is expected to under-perform the Socket Mobile. But the stock apears to be less risky and, when comparing its historical volatility, Sphere Entertainment Co is 1.65 times less risky than Socket Mobile. The stock trades about -0.02 of its potential returns per unit of risk. The Socket Mobile is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest 110.00 in Socket Mobile on September 1, 2024 and sell it today you would earn a total of 52.00 from holding Socket Mobile or generate 47.27% 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. Socket Mobile
Performance |
| Timeline |
| Sphere Entertainment |
| Socket Mobile |
Sphere Entertainment and Socket Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sphere Entertainment and Socket Mobile
The main advantage of trading using opposite Sphere Entertainment and Socket Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sphere Entertainment position performs unexpectedly, Socket Mobile 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 Socket Mobile will offset losses from the drop in Socket Mobile's long position.| Sphere Entertainment vs. JD Sports Fashion | Sphere Entertainment vs. Sun Country Airlines | Sphere Entertainment vs. SFL Corporation | Sphere Entertainment vs. Sabre Corpo |
| Socket Mobile vs. Cricut Inc | Socket Mobile vs. Nano Dimension | Socket Mobile vs. IONQ Inc | Socket Mobile vs. AGM Group Holdings |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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