Correlation Between NYSE Composite and Sony Group
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Sony Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Sony Group Corp, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Sony Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Sony Group.
Diversification Opportunities for NYSE Composite and Sony Group
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NYSE and Sony is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Sony Group go up and down completely randomly.
Pair Corralation between NYSE Composite and Sony Group
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.87 times less return on investment than Sony Group. But when comparing it to its historical volatility, NYSE Composite is 2.68 times less risky than Sony Group. It trades about 0.12 of its potential returns per unit of risk. Sony Group Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,597 in Sony Group Corp on August 24, 2024 and sell it today you would earn a total of 310.00 from holding Sony Group Corp or generate 19.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Sony Group Corp
Performance |
| Timeline |
NYSE Composite and Sony Group Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Sony Group Corp
Pair trading matchups for Sony Group
Pair Trading with NYSE Composite and Sony Group
The main advantage of trading using opposite NYSE Composite and Sony Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Akanda Corp | NYSE Composite vs. Valneva SE ADR | NYSE Composite vs. Radcom | NYSE Composite vs. Western Digital |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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