Correlation Between Sony and Transmissora Aliana
Can any of the company-specific risk be diversified away by investing in both Sony and Transmissora Aliana 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 Transmissora Aliana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sony Group and Transmissora Aliana de, you can compare the effects of market volatilities on Sony and Transmissora Aliana 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 Transmissora Aliana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony and Transmissora Aliana.
Diversification Opportunities for Sony and Transmissora Aliana
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sony and Transmissora is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group and Transmissora Aliana de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transmissora Aliana 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 Transmissora Aliana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transmissora Aliana has no effect on the direction of Sony i.e., Sony and Transmissora Aliana go up and down completely randomly.
Pair Corralation between Sony and Transmissora Aliana
Assuming the 90 days trading horizon Sony is expected to generate 6.33 times less return on investment than Transmissora Aliana. In addition to that, Sony is 1.5 times more volatile than Transmissora Aliana de. It trades about 0.01 of its total potential returns per unit of risk. Transmissora Aliana de is currently generating about 0.1 per unit of volatility. If you would invest 1,089 in Transmissora Aliana de on November 5, 2024 and sell it today you would earn a total of 21.00 from holding Transmissora Aliana de or generate 1.93% 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. Transmissora Aliana de
Performance |
| Timeline |
| Sony Group |
| Transmissora Aliana |
Sony and Transmissora Aliana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sony and Transmissora Aliana
The main advantage of trading using opposite Sony and Transmissora Aliana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony position performs unexpectedly, Transmissora Aliana 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 Transmissora Aliana will offset losses from the drop in Transmissora Aliana's long position.| Sony vs. DXC Technology | Sony vs. Charter Communications | Sony vs. Darden Restaurants, | Sony vs. British American Tobacco |
| Transmissora Aliana vs. Transmissora Aliana de | Transmissora Aliana vs. Klabin SA | Transmissora Aliana vs. Companhia de Saneamento | Transmissora Aliana vs. Transmissora Aliana de |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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