Correlation Between Integral and Sphere Entertainment

Can any of the company-specific risk be diversified away by investing in both Integral 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 Integral and Sphere Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Integral Ad Science and Sphere Entertainment Co, you can compare the effects of market volatilities on Integral 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 Integral with a short position of Sphere Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integral and Sphere Entertainment.

Diversification Opportunities for Integral and Sphere Entertainment

0.76

Correlation Coefficient

Integral  Sphere Entertainment

Poor diversification

The 3 months correlation between Integral and Sphere is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science and Sphere Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere Entertainment and Integral 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 Integral Ad Science 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 Integral i.e., Integral and Sphere Entertainment go up and down completely randomly.

Pair Corralation between Integral and Sphere Entertainment

Considering the 90-day investment horizon Integral Ad Science is expected to under-perform the Sphere Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Integral Ad Science is 1.45 times less risky than Sphere Entertainment. The stock trades about -0.1 of its potential returns per unit of risk. The Sphere Entertainment Co is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  4,500  in Sphere Entertainment Co on February 23, 2025 and sell it today you would lose (762.00) from holding Sphere Entertainment Co or give up 16.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Integral Ad Science  vs.  Sphere Entertainment Co

Integral Ad Science

Risk-Adjusted Performance

Very Weak

Over the last 90 days Integral Ad Science has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in June 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Sphere Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sphere Entertainment Co has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's technical indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Integral and Sphere Entertainment

The main advantage of trading using opposite Integral and Sphere Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral 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.

The idea behind Integral Ad Science and Sphere Entertainment Co 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.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.