Correlation Between Sony Group and MUTUIONLINE
Can any of the company-specific risk be diversified away by investing in both Sony Group and MUTUIONLINE 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 MUTUIONLINE 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 MUTUIONLINE, you can compare the effects of market volatilities on Sony Group and MUTUIONLINE 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 MUTUIONLINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony Group and MUTUIONLINE.
Diversification Opportunities for Sony Group and MUTUIONLINE
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sony and MUTUIONLINE is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group Corp and MUTUIONLINE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MUTUIONLINE 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 MUTUIONLINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MUTUIONLINE has no effect on the direction of Sony Group i.e., Sony Group and MUTUIONLINE go up and down completely randomly.
Pair Corralation between Sony Group and MUTUIONLINE
Assuming the 90 days trading horizon Sony Group Corp is expected to generate 0.91 times more return on investment than MUTUIONLINE. However, Sony Group Corp is 1.09 times less risky than MUTUIONLINE. It trades about 0.08 of its potential returns per unit of risk. MUTUIONLINE is currently generating about 0.03 per unit of risk. If you would invest 1,716 in Sony Group Corp on September 2, 2024 and sell it today you would earn a total of 170.00 from holding Sony Group Corp or generate 9.91% 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. MUTUIONLINE
Performance |
| Timeline |
| Sony Group Corp |
| MUTUIONLINE |
Sony Group and MUTUIONLINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sony Group and MUTUIONLINE
The main advantage of trading using opposite Sony Group and MUTUIONLINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony Group position performs unexpectedly, MUTUIONLINE 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 MUTUIONLINE will offset losses from the drop in MUTUIONLINE's long position.| Sony Group vs. MUTUIONLINE | Sony Group vs. Meiko Electronics Co | Sony Group vs. Methode Electronics | Sony Group vs. ELECTRONIC ARTS |
| MUTUIONLINE vs. BRIT AMER TOBACCO | MUTUIONLINE vs. IMPERIAL TOBACCO | MUTUIONLINE vs. Darden Restaurants | MUTUIONLINE vs. T Mobile |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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