Correlation Between Grupo Cementos and Sony
Can any of the company-specific risk be diversified away by investing in both Grupo Cementos and Sony 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 Grupo Cementos and Sony into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Cementos de and Sony Group, you can compare the effects of market volatilities on Grupo Cementos and Sony 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 Grupo Cementos with a short position of Sony. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Cementos and Sony.
Diversification Opportunities for Grupo Cementos and Sony
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grupo and Sony is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Cementos de and Sony Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Group and Grupo Cementos 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 Grupo Cementos de are associated (or correlated) with Sony. 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 has no effect on the direction of Grupo Cementos i.e., Grupo Cementos and Sony go up and down completely randomly.
Pair Corralation between Grupo Cementos and Sony
Assuming the 90 days trading horizon Grupo Cementos is expected to generate 1.5 times less return on investment than Sony. In addition to that, Grupo Cementos is 1.04 times more volatile than Sony Group. It trades about 0.04 of its total potential returns per unit of risk. Sony Group is currently generating about 0.06 per unit of volatility. If you would invest 31,580 in Sony Group on September 12, 2024 and sell it today you would earn a total of 12,620 from holding Sony Group or generate 39.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.73% |
| Values | Daily Returns |
Grupo Cementos de vs. Sony Group
Performance |
| Timeline |
| Grupo Cementos de |
| Sony Group |
Grupo Cementos and Sony Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Cementos and Sony
The main advantage of trading using opposite Grupo Cementos and Sony positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Cementos position performs unexpectedly, Sony 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 will offset losses from the drop in Sony's long position.| Grupo Cementos vs. CEMEX SAB de | Grupo Cementos vs. Grupo Financiero Banorte | Grupo Cementos vs. Alfa SAB de | Grupo Cementos vs. Fomento Econmico Mexicano |
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.
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