Correlation Between Sony Group and Japan Post
Can any of the company-specific risk be diversified away by investing in both Sony Group and Japan Post 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 Japan Post 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 Japan Post Insurance, you can compare the effects of market volatilities on Sony Group and Japan Post 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 Japan Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony Group and Japan Post.
Diversification Opportunities for Sony Group and Japan Post
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sony and Japan is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group Corp and Japan Post Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Post Insurance 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 Japan Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Post Insurance has no effect on the direction of Sony Group i.e., Sony Group and Japan Post go up and down completely randomly.
Pair Corralation between Sony Group and Japan Post
Assuming the 90 days trading horizon Sony Group Corp is expected to generate 3.98 times more return on investment than Japan Post. However, Sony Group is 3.98 times more volatile than Japan Post Insurance. It trades about 0.07 of its potential returns per unit of risk. Japan Post Insurance is currently generating about 0.04 per unit of risk. If you would invest 327.00 in Sony Group Corp on August 27, 2024 and sell it today you would earn a total of 1,487 from holding Sony Group Corp or generate 454.74% 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. Japan Post Insurance
Performance |
| Timeline |
| Sony Group Corp |
| Japan Post Insurance |
Sony Group and Japan Post Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sony Group and Japan Post
The main advantage of trading using opposite Sony Group and Japan Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony Group position performs unexpectedly, Japan Post 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 Japan Post will offset losses from the drop in Japan Post's long position.| Sony Group vs. Japan Post Insurance | Sony Group vs. Ping An Insurance | Sony Group vs. Fidelity National Information | Sony Group vs. INFORMATION SVC GRP |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |