Correlation Between Sphere Entertainment and Nielsen Holdings

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

Diversification Opportunities for Sphere Entertainment and Nielsen Holdings

0.0

Correlation Coefficient

Sphere Entertainment  Nielsen Holdings

Pay attention - limited upside

The 3 months correlation between Sphere and Nielsen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Nielsen Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nielsen Holdings PLC 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 Nielsen Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nielsen Holdings PLC has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Nielsen Holdings go up and down completely randomly.

Pair Corralation between Sphere Entertainment and Nielsen Holdings

If you would invest  2,742  in Sphere Entertainment Co on January 31, 2024 and sell it today you would earn a total of  1,264  from holding Sphere Entertainment Co or generate 46.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sphere Entertainment Co  vs.  Nielsen Holdings PLC

Sphere Entertainment

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sphere Entertainment Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical indicators, Sphere Entertainment reported solid returns over the last few months and may actually be approaching a breakup point.

Nielsen Holdings PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nielsen Holdings PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Nielsen Holdings is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Sphere Entertainment and Nielsen Holdings

The main advantage of trading using opposite Sphere Entertainment and Nielsen Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sphere Entertainment position performs unexpectedly, Nielsen Holdings 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 Nielsen Holdings will offset losses from the drop in Nielsen Holdings' long position.

The idea behind Sphere Entertainment Co and Nielsen Holdings PLC 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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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.