Correlation Between Sony Group and Klöckner
Can any of the company-specific risk be diversified away by investing in both Sony Group and Klöckner 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 Klöckner 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 Klckner Co SE, you can compare the effects of market volatilities on Sony Group and Klöckner 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 Klöckner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony Group and Klöckner.
Diversification Opportunities for Sony Group and Klöckner
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sony and Klöckner is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group Corp and Klckner Co SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klckner Co SE 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 Klöckner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klckner Co SE has no effect on the direction of Sony Group i.e., Sony Group and Klöckner go up and down completely randomly.
Pair Corralation between Sony Group and Klöckner
Assuming the 90 days trading horizon Sony Group Corp is expected to generate 1.12 times more return on investment than Klöckner. However, Sony Group is 1.12 times more volatile than Klckner Co SE. It trades about 0.26 of its potential returns per unit of risk. Klckner Co SE is currently generating about 0.0 per unit of risk. If you would invest 1,660 in Sony Group Corp on August 31, 2024 and sell it today you would earn a total of 228.00 from holding Sony Group Corp or generate 13.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sony Group Corp vs. Klckner Co SE
Performance |
| Timeline |
| Sony Group Corp |
| Klckner Co SE |
Sony Group and Klöckner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sony Group and Klöckner
The main advantage of trading using opposite Sony Group and Klöckner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony Group position performs unexpectedly, Klöckner 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 Klöckner will offset losses from the drop in Klöckner's long position.| Sony Group vs. Apple Inc | Sony Group vs. Apple Inc | Sony Group vs. Samsung Electronics Co | Sony Group vs. Samsung Electronics Co |
| Klöckner vs. COMMERCIAL VEHICLE | Klöckner vs. CENTURIA OFFICE REIT | Klöckner vs. Motorcar Parts of | Klöckner vs. American Homes 4 |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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