Correlation Between Casio Computer and Sony Group
Can any of the company-specific risk be diversified away by investing in both Casio Computer 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 Casio Computer and Sony Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Casio Computer Co and Sony Group Corp, you can compare the effects of market volatilities on Casio Computer 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 Casio Computer with a short position of Sony Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casio Computer and Sony Group.
Diversification Opportunities for Casio Computer and Sony Group
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Casio and Sony is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Casio Computer Co 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 Casio Computer 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 Casio Computer Co 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 Casio Computer i.e., Casio Computer and Sony Group go up and down completely randomly.
Pair Corralation between Casio Computer and Sony Group
Assuming the 90 days horizon Casio Computer Co is expected to under-perform the Sony Group. But the pink sheet apears to be less risky and, when comparing its historical volatility, Casio Computer Co is 1.11 times less risky than Sony Group. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Sony Group Corp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,785 in Sony Group Corp on August 30, 2024 and sell it today you would earn a total of 191.00 from holding Sony Group Corp or generate 10.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Casio Computer Co vs. Sony Group Corp
Performance |
| Timeline |
| Casio Computer |
| Sony Group Corp |
Casio Computer and Sony Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Casio Computer and Sony Group
The main advantage of trading using opposite Casio Computer and Sony Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casio Computer 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.| Casio Computer vs. Apple Inc | Casio Computer vs. Sharp | Casio Computer vs. TCL Electronics Holdings | Casio Computer vs. Xiaomi Corp |
| Sony Group vs. Universal Electronics | Sony Group vs. Vizio Holding Corp | Sony Group vs. VOXX International | 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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