Correlation Between Sony and ATMA Participaes
Can any of the company-specific risk be diversified away by investing in both Sony and ATMA Participaes 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 Sony and ATMA Participaes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sony Group and ATMA Participaes SA, you can compare the effects of market volatilities on Sony and ATMA Participaes 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 Sony with a short position of ATMA Participaes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony and ATMA Participaes.
Diversification Opportunities for Sony and ATMA Participaes
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sony and ATMA is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group and ATMA Participaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATMA Participaes and Sony 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 Sony Group are associated (or correlated) with ATMA Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATMA Participaes has no effect on the direction of Sony i.e., Sony and ATMA Participaes go up and down completely randomly.
Pair Corralation between Sony and ATMA Participaes
Assuming the 90 days trading horizon Sony Group is expected to generate 0.37 times more return on investment than ATMA Participaes. However, Sony Group is 2.7 times less risky than ATMA Participaes. It trades about 0.04 of its potential returns per unit of risk. ATMA Participaes SA is currently generating about -0.09 per unit of risk. If you would invest 12,960 in Sony Group on November 2, 2024 and sell it today you would earn a total of 141.00 from holding Sony Group or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sony Group vs. ATMA Participaes SA
Performance |
| Timeline |
| Sony Group |
| ATMA Participaes |
Sony and ATMA Participaes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sony and ATMA Participaes
The main advantage of trading using opposite Sony and ATMA Participaes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony position performs unexpectedly, ATMA Participaes 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 ATMA Participaes will offset losses from the drop in ATMA Participaes' long position.| Sony vs. Charter Communications | Sony vs. Patria Investments Limited | Sony vs. Clover Health Investments, | Sony vs. Telecomunicaes Brasileiras SA |
| ATMA Participaes vs. Triunfo Participaes e | ATMA Participaes vs. Azevedo Travassos SA | ATMA Participaes vs. Azevedo Travassos SA | ATMA Participaes vs. Lupatech SA |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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