Correlation Between Apple and Sony Corp
Can any of the company-specific risk be diversified away by investing in both Apple and Sony Corp 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 Apple and Sony Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Sony Corp, you can compare the effects of market volatilities on Apple and Sony Corp 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 Apple with a short position of Sony Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Sony Corp.
Diversification Opportunities for Apple and Sony Corp
Poor diversification
The 3 months correlation between Apple and Sony is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Sony Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Corp and Apple 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 Apple Inc are associated (or correlated) with Sony Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sony Corp has no effect on the direction of Apple i.e., Apple and Sony Corp go up and down completely randomly.
Pair Corralation between Apple and Sony Corp
Given the investment horizon of 90 days Apple is expected to generate 104.98 times less return on investment than Sony Corp. But when comparing it to its historical volatility, Apple Inc is 56.75 times less risky than Sony Corp. It trades about 0.08 of its potential returns per unit of risk. Sony Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,616 in Sony Corp on November 1, 2024 and sell it today you would earn a total of 627.00 from holding Sony Corp or generate 38.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.15% |
| Values | Daily Returns |
Apple Inc vs. Sony Corp
Performance |
| Timeline |
| Apple Inc |
| Sony Corp |
Apple and Sony Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Sony Corp
The main advantage of trading using opposite Apple and Sony Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Sony Corp 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 Sony Corp will offset losses from the drop in Sony Corp's long position.| Apple vs. Rigetti Computing | Apple vs. D Wave Quantum | Apple vs. Desktop Metal | Apple vs. Quantum Computing |
| Sony Corp vs. LG Display Co | Sony Corp vs. Sonos Inc | Sony Corp vs. TCL Electronics Holdings | Sony Corp vs. Sharp Corp ADR |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |