Correlation Between Sphere Entertainment and Albemarle

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

Diversification Opportunities for Sphere Entertainment and Albemarle

0.75

Correlation Coefficient

Sphere Entertainment  Albemarle

Poor diversification

The 3 months correlation between Sphere and Albemarle is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Albemarle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albemarle 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 Albemarle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albemarle has no effect on the direction of Sphere Entertainment i.e., Sphere Entertainment and Albemarle go up and down completely randomly.

Pair Corralation between Sphere Entertainment and Albemarle

Given the investment horizon of 90 days Sphere Entertainment Co is expected to generate 0.95 times more return on investment than Albemarle. However, Sphere Entertainment Co is 1.06 times less risky than Albemarle. It trades about 0.2 of its potential returns per unit of risk. Albemarle is currently generating about 0.09 per unit of risk. If you would invest  2,899  in Sphere Entertainment Co on May 6, 2025 and sell it today you would earn a total of  1,172  from holding Sphere Entertainment Co or generate 40.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Sphere Entertainment Co  vs.  Albemarle

Sphere Entertainment

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sphere Entertainment Co are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting technical indicators, Sphere Entertainment reported solid returns over the last few months and may actually be approaching a breakup point.

Albemarle

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Albemarle are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Albemarle sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sphere Entertainment and Albemarle

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

The idea behind Sphere Entertainment Co and Albemarle 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.