Correlation Between Sony Group and Cromwell Property
Can any of the company-specific risk be diversified away by investing in both Sony Group and Cromwell Property 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 Cromwell Property 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 Cromwell Property Group, you can compare the effects of market volatilities on Sony Group and Cromwell Property 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 Cromwell Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony Group and Cromwell Property.
Diversification Opportunities for Sony Group and Cromwell Property
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sony and Cromwell is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group Corp and Cromwell Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cromwell Property 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 Cromwell Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cromwell Property has no effect on the direction of Sony Group i.e., Sony Group and Cromwell Property go up and down completely randomly.
Pair Corralation between Sony Group and Cromwell Property
Given the investment horizon of 90 days Sony Group Corp is expected to generate 3.46 times more return on investment than Cromwell Property. However, Sony Group is 3.46 times more volatile than Cromwell Property Group. It trades about 0.09 of its potential returns per unit of risk. Cromwell Property Group is currently generating about 0.14 per unit of risk. If you would invest 1,903 in Sony Group Corp on November 2, 2024 and sell it today you would earn a total of 327.00 from holding Sony Group Corp or generate 17.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sony Group Corp vs. Cromwell Property Group
Performance |
| Timeline |
| Sony Group Corp |
| Cromwell Property |
Sony Group and Cromwell Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sony Group and Cromwell Property
The main advantage of trading using opposite Sony Group and Cromwell Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony Group position performs unexpectedly, Cromwell Property 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 Cromwell Property will offset losses from the drop in Cromwell Property's long position.| Sony Group vs. Universal Electronics | Sony Group vs. VOXX International | Sony Group vs. Samsung Electronics Co | Sony Group vs. Sharp |
| Cromwell Property vs. ProSiebenSat1 Media AG | Cromwell Property vs. RTL Group SA | Cromwell Property vs. iHeartMedia | Cromwell Property vs. ITV PLC ADR |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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