Correlation Between Sphere Entertainment and GLOBAL

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Can any of the company-specific risk be diversified away by investing in both Sphere Entertainment and GLOBAL 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 GLOBAL 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 GLOBAL PAYMENTS INC, you can compare the effects of market volatilities on Sphere Entertainment and GLOBAL 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 GLOBAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sphere Entertainment and GLOBAL.

Diversification Opportunities for Sphere Entertainment and GLOBAL

0.49
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Sphere and GLOBAL is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and GLOBAL PAYMENTS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLOBAL PAYMENTS INC 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 GLOBAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLOBAL PAYMENTS INC has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and GLOBAL go up and down completely randomly.

Pair Corralation between Sphere Entertainment and GLOBAL

Given the investment horizon of 90 days Sphere Entertainment Co is expected to under-perform the GLOBAL. In addition to that, Sphere Entertainment is 16.78 times more volatile than GLOBAL PAYMENTS INC. It trades about -0.14 of its total potential returns per unit of risk. GLOBAL PAYMENTS INC is currently generating about 0.07 per unit of volatility. If you would invest  9,615  in GLOBAL PAYMENTS INC on November 28, 2024 and sell it today you would earn a total of  21.00  from holding GLOBAL PAYMENTS INC or generate 0.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.45%
ValuesDaily Returns

Sphere Entertainment Co  vs.  GLOBAL PAYMENTS INC

 Performance 
       Timeline  
Sphere Entertainment 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Sphere Entertainment Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical indicators, Sphere Entertainment is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.
GLOBAL PAYMENTS INC 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in GLOBAL PAYMENTS INC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, GLOBAL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Sphere Entertainment and GLOBAL Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sphere Entertainment and GLOBAL

The main advantage of trading using opposite Sphere Entertainment and GLOBAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sphere Entertainment position performs unexpectedly, GLOBAL 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 GLOBAL will offset losses from the drop in GLOBAL's long position.
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The idea behind Sphere Entertainment Co and GLOBAL PAYMENTS INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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