Correlation Between Sony and International Meal
Can any of the company-specific risk be diversified away by investing in both Sony and International Meal 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 International Meal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sony Group and International Meal, you can compare the effects of market volatilities on Sony and International Meal 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 International Meal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony and International Meal.
Diversification Opportunities for Sony and International Meal
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sony and International is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group and International Meal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Meal 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 International Meal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Meal has no effect on the direction of Sony i.e., Sony and International Meal go up and down completely randomly.
Pair Corralation between Sony and International Meal
Assuming the 90 days trading horizon Sony Group is expected to generate 0.95 times more return on investment than International Meal. However, Sony Group is 1.05 times less risky than International Meal. It trades about 0.31 of its potential returns per unit of risk. International Meal is currently generating about -0.06 per unit of risk. If you would invest 10,294 in Sony Group on September 3, 2024 and sell it today you would earn a total of 1,772 from holding Sony Group or generate 17.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sony Group vs. International Meal
Performance |
| Timeline |
| Sony Group |
| International Meal |
Sony and International Meal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sony and International Meal
The main advantage of trading using opposite Sony and International Meal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony position performs unexpectedly, International Meal 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 International Meal will offset losses from the drop in International Meal's long position.| Sony vs. Bemobi Mobile Tech | Sony vs. Take Two Interactive Software | Sony vs. T Mobile | Sony vs. Verizon Communications |
| International Meal vs. Cogna Educao SA | International Meal vs. JHSF Participaes SA | International Meal vs. Tecnisa SA | International Meal vs. CVC Brasil Operadora |
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 CEOs Directory module to screen CEOs from public companies around the world.
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