Correlation Between Lion One and Sony Group
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and Sony Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and Sony Group Corp, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of Sony Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Sony Group.
Diversification Opportunities for Lion One and Sony Group
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lion and Sony is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals 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 Lion One 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 Lion One Metals 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 Lion One i.e., Lion One and Sony Group go up and down completely randomly.
Pair Corralation between Lion One and Sony Group
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Sony Group. But the stock apears to be less risky and, when comparing its historical volatility, Lion One Metals is 1.7 times less risky than Sony Group. The stock trades about -0.03 of its potential returns per unit of risk. The Sony Group Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 333.00 in Sony Group Corp on September 3, 2024 and sell it today you would earn a total of 1,564 from holding Sony Group Corp or generate 469.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. Sony Group Corp
Performance |
| Timeline |
| Lion One Metals |
| Sony Group Corp |
Lion One and Sony Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Sony Group
The main advantage of trading using opposite Lion One and Sony Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.| Lion One vs. Cars Inc | Lion One vs. Chunghwa Telecom Co | Lion One vs. United Internet AG | Lion One vs. JAPAN TOBACCO UNSPADR12 |
| Sony Group vs. CANON MARKETING JP | Sony Group vs. MARKET VECTR RETAIL | Sony Group vs. FAST RETAIL ADR | Sony Group vs. UPDATE SOFTWARE |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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