Correlation Between Sony and CCR SA
Can any of the company-specific risk be diversified away by investing in both Sony and CCR SA 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 CCR SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sony Group and CCR SA, you can compare the effects of market volatilities on Sony and CCR SA 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 CCR SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony and CCR SA.
Diversification Opportunities for Sony and CCR SA
Very good diversification
The 3 months correlation between Sony and CCR is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group and CCR SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCR SA 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 CCR SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCR SA has no effect on the direction of Sony i.e., Sony and CCR SA go up and down completely randomly.
Pair Corralation between Sony and CCR SA
Assuming the 90 days trading horizon Sony Group is expected to generate 31.06 times more return on investment than CCR SA. However, Sony is 31.06 times more volatile than CCR SA. It trades about 0.08 of its potential returns per unit of risk. CCR SA is currently generating about -0.01 per unit of risk. If you would invest 9,400 in Sony Group on August 27, 2024 and sell it today you would earn a total of 1,679 from holding Sony Group or generate 17.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Sony Group vs. CCR SA
Performance |
| Timeline |
| Sony Group |
| CCR SA |
Sony and CCR SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sony and CCR SA
The main advantage of trading using opposite Sony and CCR SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony position performs unexpectedly, CCR SA 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 CCR SA will offset losses from the drop in CCR SA's long position.The idea behind Sony Group and CCR SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| CCR SA vs. EcoRodovias Infraestrutura e | CCR SA vs. Companhia de Saneamento | CCR SA vs. Companhia Energtica de | CCR SA vs. Cosan 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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