Correlation Between Sony Group and Pandora AS
Can any of the company-specific risk be diversified away by investing in both Sony Group and Pandora AS 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 Group and Pandora AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sony Group Corp and Pandora AS, you can compare the effects of market volatilities on Sony Group and Pandora AS 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 Group with a short position of Pandora AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony Group and Pandora AS.
Diversification Opportunities for Sony Group and Pandora AS
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sony and Pandora is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group Corp and Pandora AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pandora AS and Sony Group 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 Corp are associated (or correlated) with Pandora AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pandora AS has no effect on the direction of Sony Group i.e., Sony Group and Pandora AS go up and down completely randomly.
Pair Corralation between Sony Group and Pandora AS
Assuming the 90 days trading horizon Sony Group Corp is expected to generate 3.74 times more return on investment than Pandora AS. However, Sony Group is 3.74 times more volatile than Pandora AS. It trades about 0.07 of its potential returns per unit of risk. Pandora AS is currently generating about 0.12 per unit of risk. If you would invest 355.00 in Sony Group Corp on October 13, 2024 and sell it today you would earn a total of 1,631 from holding Sony Group Corp or generate 459.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sony Group Corp vs. Pandora AS
Performance |
| Timeline |
| Sony Group Corp |
| Pandora AS |
Sony Group and Pandora AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sony Group and Pandora AS
The main advantage of trading using opposite Sony Group and Pandora AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony Group position performs unexpectedly, Pandora AS 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 Pandora AS will offset losses from the drop in Pandora AS's long position.| Sony Group vs. USU Software AG | Sony Group vs. Constellation Software | Sony Group vs. MAGIC SOFTWARE ENTR | Sony Group vs. FORMPIPE SOFTWARE AB |
| Pandora AS vs. CALTAGIRONE EDITORE | Pandora AS vs. STEEL DYNAMICS | Pandora AS vs. COSMOSTEEL HLDGS | Pandora AS vs. Sch Environnement 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |