Correlation Between XFit Brands and Sphere Entertainment
Can any of the company-specific risk be diversified away by investing in both XFit Brands and Sphere Entertainment 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 XFit Brands and Sphere Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XFit Brands and Sphere Entertainment Co, you can compare the effects of market volatilities on XFit Brands and Sphere Entertainment 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 XFit Brands with a short position of Sphere Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of XFit Brands and Sphere Entertainment.
Diversification Opportunities for XFit Brands and Sphere Entertainment
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between XFit and Sphere is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding XFit Brands and Sphere Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere Entertainment and XFit Brands 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 XFit Brands are associated (or correlated) with Sphere Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sphere Entertainment has no effect on the direction of XFit Brands i.e., XFit Brands and Sphere Entertainment go up and down completely randomly.
Pair Corralation between XFit Brands and Sphere Entertainment
Given the investment horizon of 90 days XFit Brands is expected to generate 6.97 times more return on investment than Sphere Entertainment. However, XFit Brands is 6.97 times more volatile than Sphere Entertainment Co. It trades about 0.04 of its potential returns per unit of risk. Sphere Entertainment Co is currently generating about 0.05 per unit of risk. If you would invest 0.06 in XFit Brands on November 29, 2024 and sell it today you would earn a total of 0.04 from holding XFit Brands or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
XFit Brands vs. Sphere Entertainment Co
Performance |
| Timeline |
| XFit Brands |
| Sphere Entertainment |
XFit Brands and Sphere Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XFit Brands and Sphere Entertainment
The main advantage of trading using opposite XFit Brands and Sphere Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XFit Brands position performs unexpectedly, Sphere Entertainment 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 Sphere Entertainment will offset losses from the drop in Sphere Entertainment's long position.| XFit Brands vs. Sligro Food Group | XFit Brands vs. Tradeshow Marketing | XFit Brands vs. Academy Sports Outdoors | XFit Brands vs. BBB Foods |
| Sphere Entertainment vs. Azul SA | Sphere Entertainment vs. Southwest Airlines | Sphere Entertainment vs. Solstad Offshore ASA | Sphere Entertainment vs. Southern Home Medicl |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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