Correlation Between Sphere Entertainment and Castle Biosciences
Can any of the company-specific risk be diversified away by investing in both Sphere Entertainment and Castle Biosciences 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 Castle Biosciences 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 Castle Biosciences, you can compare the effects of market volatilities on Sphere Entertainment and Castle Biosciences 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 Castle Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sphere Entertainment and Castle Biosciences.
Diversification Opportunities for Sphere Entertainment and Castle Biosciences
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sphere and Castle is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Castle Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castle Biosciences 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 Castle Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castle Biosciences has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Castle Biosciences go up and down completely randomly.
Pair Corralation between Sphere Entertainment and Castle Biosciences
Given the investment horizon of 90 days Sphere Entertainment Co is expected to generate 1.07 times more return on investment than Castle Biosciences. However, Sphere Entertainment is 1.07 times more volatile than Castle Biosciences. It trades about 0.25 of its potential returns per unit of risk. Castle Biosciences is currently generating about -0.11 per unit of risk. If you would invest 2,956 in Sphere Entertainment Co on April 26, 2025 and sell it today you would earn a total of 1,560 from holding Sphere Entertainment Co or generate 52.77% 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. Castle Biosciences
Performance |
| Timeline |
| Sphere Entertainment |
| Castle Biosciences |
Sphere Entertainment and Castle Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sphere Entertainment and Castle Biosciences
The main advantage of trading using opposite Sphere Entertainment and Castle Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sphere Entertainment position performs unexpectedly, Castle Biosciences 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 Castle Biosciences will offset losses from the drop in Castle Biosciences' long position.| Sphere Entertainment vs. Yoshitsu Co Ltd | Sphere Entertainment vs. Arhaus Inc | Sphere Entertainment vs. El Pollo Loco | Sphere Entertainment vs. Kite Realty Group |
| Castle Biosciences vs. Personalis | Castle Biosciences vs. Sera Prognostics | Castle Biosciences vs. CareDx Inc | Castle Biosciences vs. DarioHealth Corp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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