Correlation Between Sony Group and Panasonic Corp
Can any of the company-specific risk be diversified away by investing in both Sony Group and Panasonic Corp 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 Panasonic Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sony Group and Panasonic Corp, you can compare the effects of market volatilities on Sony Group and Panasonic Corp 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 Panasonic Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony Group and Panasonic Corp.
Diversification Opportunities for Sony Group and Panasonic Corp
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sony and Panasonic is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group and Panasonic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panasonic Corp 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 Panasonic Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panasonic Corp has no effect on the direction of Sony Group i.e., Sony Group and Panasonic Corp go up and down completely randomly.
Pair Corralation between Sony Group and Panasonic Corp
Assuming the 90 days trading horizon Sony Group is expected to generate 2.65 times less return on investment than Panasonic Corp. In addition to that, Sony Group is 1.05 times more volatile than Panasonic Corp. It trades about 0.11 of its total potential returns per unit of risk. Panasonic Corp is currently generating about 0.3 per unit of volatility. If you would invest 745.00 in Panasonic Corp on August 24, 2024 and sell it today you would earn a total of 175.00 from holding Panasonic Corp or generate 23.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sony Group vs. Panasonic Corp
Performance |
| Timeline |
| Sony Group |
| Panasonic Corp |
Sony Group and Panasonic Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sony Group and Panasonic Corp
The main advantage of trading using opposite Sony Group and Panasonic Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony Group position performs unexpectedly, Panasonic Corp 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 Panasonic Corp will offset losses from the drop in Panasonic Corp's long position.| Sony Group vs. Amazon Inc | Sony Group vs. Microsoft | Sony Group vs. Tesla Inc | Sony Group vs. Alphabet Class A |
| Panasonic Corp vs. Arrow Electronics | Panasonic Corp vs. Meiko Electronics Co | Panasonic Corp vs. CANON MARKETING JP | Panasonic Corp vs. STORE ELECTRONIC |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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