Correlation Between Sony Corp and Sharp Corp
Can any of the company-specific risk be diversified away by investing in both Sony Corp and Sharp Corp 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 Corp and Sharp Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sony Corp and Sharp Corp ADR, you can compare the effects of market volatilities on Sony Corp and Sharp Corp 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 Corp with a short position of Sharp Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony Corp and Sharp Corp.
Diversification Opportunities for Sony Corp and Sharp Corp
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sony and Sharp is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sony Corp and Sharp Corp ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharp Corp ADR and Sony Corp 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 Corp are associated (or correlated) with Sharp Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharp Corp ADR has no effect on the direction of Sony Corp i.e., Sony Corp and Sharp Corp go up and down completely randomly.
Pair Corralation between Sony Corp and Sharp Corp
Assuming the 90 days horizon Sony Corp is expected to generate 1.13 times more return on investment than Sharp Corp. However, Sony Corp is 1.13 times more volatile than Sharp Corp ADR. It trades about 0.04 of its potential returns per unit of risk. Sharp Corp ADR is currently generating about -0.02 per unit of risk. If you would invest 1,774 in Sony Corp on August 23, 2024 and sell it today you would earn a total of 26.00 from holding Sony Corp or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sony Corp vs. Sharp Corp ADR
Performance |
| Timeline |
| Sony Corp |
| Sharp Corp ADR |
Sony Corp and Sharp Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sony Corp and Sharp Corp
The main advantage of trading using opposite Sony Corp and Sharp Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony Corp position performs unexpectedly, Sharp Corp 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 Sharp Corp will offset losses from the drop in Sharp Corp's long position.| Sony Corp vs. LG Display Co | Sony Corp vs. Sonos Inc | Sony Corp vs. Vizio Holding Corp | Sony Corp vs. TCL Electronics Holdings |
| Sharp Corp vs. TCL Electronics Holdings | Sharp Corp vs. Samsung Electronics Co | Sharp Corp vs. Sony Corp | Sharp Corp vs. Apple Inc |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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