Correlation Between Sony Group and REMEDY ENTERTAINMENT
Can any of the company-specific risk be diversified away by investing in both Sony Group and REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT OYJ, you can compare the effects of market volatilities on Sony Group and REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony Group and REMEDY ENTERTAINMENT.
Diversification Opportunities for Sony Group and REMEDY ENTERTAINMENT
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sony and REMEDY is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group Corp and REMEDY ENTERTAINMENT OYJ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REMEDY ENTERTAINMENT OYJ 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 REMEDY ENTERTAINMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REMEDY ENTERTAINMENT OYJ has no effect on the direction of Sony Group i.e., Sony Group and REMEDY ENTERTAINMENT go up and down completely randomly.
Pair Corralation between Sony Group and REMEDY ENTERTAINMENT
Assuming the 90 days trading horizon Sony Group Corp is expected to generate 0.83 times more return on investment than REMEDY ENTERTAINMENT. However, Sony Group Corp is 1.2 times less risky than REMEDY ENTERTAINMENT. It trades about 0.18 of its potential returns per unit of risk. REMEDY ENTERTAINMENT OYJ is currently generating about -0.21 per unit of risk. If you would invest 2,009 in Sony Group Corp on November 5, 2024 and sell it today you would earn a total of 116.00 from holding Sony Group Corp or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sony Group Corp vs. REMEDY ENTERTAINMENT OYJ
Performance |
| Timeline |
| Sony Group Corp |
| REMEDY ENTERTAINMENT OYJ |
Sony Group and REMEDY ENTERTAINMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sony Group and REMEDY ENTERTAINMENT
The main advantage of trading using opposite Sony Group and REMEDY ENTERTAINMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony Group position performs unexpectedly, REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT will offset losses from the drop in REMEDY ENTERTAINMENT's long position.| Sony Group vs. Synovus Financial Corp | Sony Group vs. Chiba Bank | Sony Group vs. HEALTHSTREAM | Sony Group vs. Virtu Financial |
| REMEDY ENTERTAINMENT vs. REINET INVESTMENTS SCA | REMEDY ENTERTAINMENT vs. NORWEGIAN AIR SHUT | REMEDY ENTERTAINMENT vs. CHINA SOUTHN AIR H | REMEDY ENTERTAINMENT vs. CDL INVESTMENT |
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 Stocks Directory module to find actively traded stocks across global markets.
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