Correlation Between BB Biotech and Sony Group
Can any of the company-specific risk be diversified away by investing in both BB Biotech and Sony Group 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 BB Biotech and Sony Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BB Biotech AG and Sony Group Corp, you can compare the effects of market volatilities on BB Biotech and Sony Group 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 BB Biotech with a short position of Sony Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Biotech and Sony Group.
Diversification Opportunities for BB Biotech and Sony Group
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BBZA and Sony is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding BB Biotech AG and Sony Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Group Corp and BB Biotech 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 BB Biotech AG are associated (or correlated) with Sony Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sony Group Corp has no effect on the direction of BB Biotech i.e., BB Biotech and Sony Group go up and down completely randomly.
Pair Corralation between BB Biotech and Sony Group
Assuming the 90 days trading horizon BB Biotech is expected to generate 7.88 times less return on investment than Sony Group. But when comparing it to its historical volatility, BB Biotech AG is 1.24 times less risky than Sony Group. It trades about 0.04 of its potential returns per unit of risk. Sony Group Corp is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,660 in Sony Group Corp on August 31, 2024 and sell it today you would earn a total of 228.00 from holding Sony Group Corp or generate 13.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
BB Biotech AG vs. Sony Group Corp
Performance |
| Timeline |
| BB Biotech AG |
| Sony Group Corp |
BB Biotech and Sony Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BB Biotech and Sony Group
The main advantage of trading using opposite BB Biotech and Sony Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Biotech position performs unexpectedly, Sony Group 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 Group will offset losses from the drop in Sony Group's long position.| BB Biotech vs. Granite Construction | BB Biotech vs. ANTA SPORTS PRODUCT | BB Biotech vs. Daito Trust Construction | BB Biotech vs. WIMFARM SA EO |
| Sony Group vs. Apple Inc | Sony Group vs. Apple Inc | Sony Group vs. Samsung Electronics Co | Sony Group vs. Samsung Electronics Co |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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