Correlation Between HealthStream and Sphere Entertainment
Can any of the company-specific risk be diversified away by investing in both HealthStream 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 HealthStream and Sphere Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HealthStream and Sphere Entertainment Co, you can compare the effects of market volatilities on HealthStream 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 HealthStream with a short position of Sphere Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of HealthStream and Sphere Entertainment.
Diversification Opportunities for HealthStream and Sphere Entertainment
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HealthStream and Sphere is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding HealthStream and Sphere Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere Entertainment and HealthStream 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 HealthStream 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 HealthStream i.e., HealthStream and Sphere Entertainment go up and down completely randomly.
Pair Corralation between HealthStream and Sphere Entertainment
Given the investment horizon of 90 days HealthStream is expected to under-perform the Sphere Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, HealthStream is 1.07 times less risky than Sphere Entertainment. The stock trades about -0.09 of its potential returns per unit of risk. The Sphere Entertainment Co is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 2,428 in Sphere Entertainment Co on April 21, 2025 and sell it today you would earn a total of 2,187 from holding Sphere Entertainment Co or generate 90.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HealthStream vs. Sphere Entertainment Co
Performance |
| Timeline |
| HealthStream |
| Sphere Entertainment |
HealthStream and Sphere Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HealthStream and Sphere Entertainment
The main advantage of trading using opposite HealthStream and Sphere Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HealthStream 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.| HealthStream vs. TruBridge | HealthStream vs. National Research Corp | HealthStream vs. Forian Inc | HealthStream vs. HealthEquity |
| Sphere Entertainment vs. Western Copper and | Sphere Entertainment vs. Penn National Gaming | Sphere Entertainment vs. Take Two Interactive Software | Sphere Entertainment vs. Old Dominion Freight |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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