Correlation Between Sony Group and FirstGroup Plc
Can any of the company-specific risk be diversified away by investing in both Sony Group and FirstGroup Plc 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 FirstGroup Plc 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 FirstGroup plc, you can compare the effects of market volatilities on Sony Group and FirstGroup Plc 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 FirstGroup Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony Group and FirstGroup Plc.
Diversification Opportunities for Sony Group and FirstGroup Plc
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sony and FirstGroup is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group Corp and FirstGroup plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstGroup plc 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 FirstGroup Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FirstGroup plc has no effect on the direction of Sony Group i.e., Sony Group and FirstGroup Plc go up and down completely randomly.
Pair Corralation between Sony Group and FirstGroup Plc
Assuming the 90 days trading horizon Sony Group Corp is expected to generate 0.81 times more return on investment than FirstGroup Plc. However, Sony Group Corp is 1.23 times less risky than FirstGroup Plc. It trades about -0.1 of its potential returns per unit of risk. FirstGroup plc is currently generating about -0.08 per unit of risk. If you would invest 2,028 in Sony Group Corp on October 23, 2024 and sell it today you would lose (46.00) from holding Sony Group Corp or give up 2.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 94.12% |
| Values | Daily Returns |
Sony Group Corp vs. FirstGroup plc
Performance |
| Timeline |
| Sony Group Corp |
| FirstGroup plc |
Sony Group and FirstGroup Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sony Group and FirstGroup Plc
The main advantage of trading using opposite Sony Group and FirstGroup Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony Group position performs unexpectedly, FirstGroup Plc 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 FirstGroup Plc will offset losses from the drop in FirstGroup Plc's long position.| Sony Group vs. Gold Road Resources | Sony Group vs. TITANIUM TRANSPORTGROUP | Sony Group vs. TEXAS ROADHOUSE | Sony Group vs. TRAINLINE PLC LS |
| FirstGroup Plc vs. Bausch Health Companies | FirstGroup Plc vs. The Trade Desk | FirstGroup Plc vs. Siemens Healthineers AG | FirstGroup Plc vs. Canon Marketing Japan |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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