Correlation Between Sony Group and China Resources
Can any of the company-specific risk be diversified away by investing in both Sony Group and China Resources 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 China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sony Group and China Resources Beer, you can compare the effects of market volatilities on Sony Group and China Resources 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 China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony Group and China Resources.
Diversification Opportunities for Sony Group and China Resources
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sony and China is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group and China Resources Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Beer 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 China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Beer has no effect on the direction of Sony Group i.e., Sony Group and China Resources go up and down completely randomly.
Pair Corralation between Sony Group and China Resources
Assuming the 90 days trading horizon Sony Group is expected to generate 0.94 times more return on investment than China Resources. However, Sony Group is 1.07 times less risky than China Resources. It trades about 0.1 of its potential returns per unit of risk. China Resources Beer is currently generating about -0.08 per unit of risk. If you would invest 1,740 in Sony Group on October 20, 2024 and sell it today you would earn a total of 170.00 from holding Sony Group or generate 9.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sony Group vs. China Resources Beer
Performance |
| Timeline |
| Sony Group |
| China Resources Beer |
Sony Group and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sony Group and China Resources
The main advantage of trading using opposite Sony Group and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony Group position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| Sony Group vs. Xenia Hotels Resorts | Sony Group vs. Benchmark Electronics | Sony Group vs. Renesas Electronics | Sony Group vs. Delta Electronics Public |
| China Resources vs. CN MODERN DAIRY | China Resources vs. THAI BEVERAGE | China Resources vs. GWILLI FOOD | China Resources vs. MTY Food Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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