Correlation Between Sony and Itasa Investimentos
Can any of the company-specific risk be diversified away by investing in both Sony and Itasa Investimentos 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 Itasa Investimentos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sony Group and Itasa Investimentos, you can compare the effects of market volatilities on Sony and Itasa Investimentos 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 Itasa Investimentos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony and Itasa Investimentos.
Diversification Opportunities for Sony and Itasa Investimentos
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sony and Itasa is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group and Itasa Investimentos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itasa Investimentos 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 Itasa Investimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itasa Investimentos has no effect on the direction of Sony i.e., Sony and Itasa Investimentos go up and down completely randomly.
Pair Corralation between Sony and Itasa Investimentos
Assuming the 90 days trading horizon Sony Group is expected to generate 1.6 times more return on investment than Itasa Investimentos. However, Sony is 1.6 times more volatile than Itasa Investimentos. It trades about 0.09 of its potential returns per unit of risk. Itasa Investimentos is currently generating about 0.02 per unit of risk. If you would invest 8,912 in Sony Group on November 8, 2024 and sell it today you would earn a total of 4,347 from holding Sony Group or generate 48.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sony Group vs. Itasa Investimentos
Performance |
| Timeline |
| Sony Group |
| Itasa Investimentos |
Sony and Itasa Investimentos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sony and Itasa Investimentos
The main advantage of trading using opposite Sony and Itasa Investimentos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony position performs unexpectedly, Itasa Investimentos 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 Itasa Investimentos will offset losses from the drop in Itasa Investimentos' long position.| Sony vs. G2D Investments | Sony vs. Electronic Arts | Sony vs. Paycom Software | Sony vs. Marfrig Global Foods |
| Itasa Investimentos vs. Banco do Brasil | Itasa Investimentos vs. Banco Bradesco SA | Itasa Investimentos vs. Ita Unibanco Holding | Itasa Investimentos vs. Petrleo Brasileiro 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |