Correlation Between Sony Group and Apple
Can any of the company-specific risk be diversified away by investing in both Sony Group and Apple 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 Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sony Group and Apple Inc, you can compare the effects of market volatilities on Sony Group and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony Group and Apple.
Diversification Opportunities for Sony Group and Apple
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sony and Apple is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Sony Group i.e., Sony Group and Apple go up and down completely randomly.
Pair Corralation between Sony Group and Apple
Assuming the 90 days trading horizon Sony Group is expected to generate 3.44 times more return on investment than Apple. However, Sony Group is 3.44 times more volatile than Apple Inc. It trades about 0.17 of its potential returns per unit of risk. Apple Inc is currently generating about 0.4 per unit of risk. If you would invest 1,610 in Sony Group on September 1, 2024 and sell it today you would earn a total of 200.00 from holding Sony Group or generate 12.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sony Group vs. Apple Inc
Performance |
| Timeline |
| Sony Group |
| Apple Inc |
Sony Group and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sony Group and Apple
The main advantage of trading using opposite Sony Group and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony Group position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Sony Group vs. Universal Display | Sony Group vs. Evolution Mining Limited | Sony Group vs. Ming Le Sports | Sony Group vs. KOOL2PLAY SA ZY |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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