Correlation Between Emerson Radio and Sony Group
Can any of the company-specific risk be diversified away by investing in both Emerson Radio 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 Emerson Radio and Sony Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerson Radio and Sony Group Corp, you can compare the effects of market volatilities on Emerson Radio 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 Emerson Radio with a short position of Sony Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Radio and Sony Group.
Diversification Opportunities for Emerson Radio and Sony Group
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Emerson and Sony is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Radio 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 Emerson Radio 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 Emerson Radio 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 Emerson Radio i.e., Emerson Radio and Sony Group go up and down completely randomly.
Pair Corralation between Emerson Radio and Sony Group
Considering the 90-day investment horizon Emerson Radio is expected to generate 4.98 times more return on investment than Sony Group. However, Emerson Radio is 4.98 times more volatile than Sony Group Corp. It trades about 0.19 of its potential returns per unit of risk. Sony Group Corp is currently generating about -0.05 per unit of risk. If you would invest 42.00 in Emerson Radio on October 24, 2024 and sell it today you would earn a total of 9.00 from holding Emerson Radio or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerson Radio vs. Sony Group Corp
Performance |
| Timeline |
| Emerson Radio |
| Sony Group Corp |
Emerson Radio and Sony Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Radio and Sony Group
The main advantage of trading using opposite Emerson Radio and Sony Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Radio 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.| Emerson Radio vs. VOXX International | Emerson Radio vs. LG Display Co | Emerson Radio vs. Koss Corporation | Emerson Radio vs. Wearable Devices |
| Sony Group vs. Universal Electronics | Sony Group vs. VOXX International | Sony Group vs. Samsung Electronics Co | Sony Group vs. Sharp |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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