Correlation Between Village Super and Sphere Entertainment

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

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

Diversification Opportunities for Village Super and Sphere Entertainment

0.1

Correlation Coefficient

Village Super  Sphere Entertainment

Average diversification

The 3 months correlation between Village and Sphere is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Village Super Market and Sphere Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere Entertainment and Village Super 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 Village Super Market 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 Village Super i.e., Village Super and Sphere Entertainment go up and down completely randomly.

Pair Corralation between Village Super and Sphere Entertainment

Assuming the 90 days horizon Village Super Market is expected to under-perform the Sphere Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Village Super Market is 2.05 times less risky than Sphere Entertainment. The stock trades about -0.08 of its potential returns per unit of risk. The Sphere Entertainment Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  2,794  in Sphere Entertainment Co on May 5, 2025 and sell it today you would earn a total of  1,277  from holding Sphere Entertainment Co or generate 45.71% return on investment over 90 days.

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

Village Super Market  vs.  Sphere Entertainment Co

Village Super Market

Risk-Adjusted Performance

Very Weak

Over the last 90 days Village Super Market has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile technical indicators, Sphere Entertainment reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Village Super and Sphere Entertainment

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

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.