Correlation Between Sony Group and Casio Computer
Can any of the company-specific risk be diversified away by investing in both Sony Group and Casio Computer 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 Casio Computer 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 Casio Computer Co, you can compare the effects of market volatilities on Sony Group and Casio Computer 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 Casio Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony Group and Casio Computer.
Diversification Opportunities for Sony Group and Casio Computer
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sony and Casio is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group Corp and Casio Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casio Computer 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 Casio Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casio Computer has no effect on the direction of Sony Group i.e., Sony Group and Casio Computer go up and down completely randomly.
Pair Corralation between Sony Group and Casio Computer
Given the investment horizon of 90 days Sony Group Corp is expected to generate 0.61 times more return on investment than Casio Computer. However, Sony Group Corp is 1.65 times less risky than Casio Computer. It trades about 0.17 of its potential returns per unit of risk. Casio Computer Co is currently generating about 0.07 per unit of risk. If you would invest 2,001 in Sony Group Corp on November 1, 2024 and sell it today you would earn a total of 229.00 from holding Sony Group Corp or generate 11.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sony Group Corp vs. Casio Computer Co
Performance |
| Timeline |
| Sony Group Corp |
| Casio Computer |
Sony Group and Casio Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sony Group and Casio Computer
The main advantage of trading using opposite Sony Group and Casio Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony Group position performs unexpectedly, Casio Computer 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 Casio Computer will offset losses from the drop in Casio Computer's long position.| Sony Group vs. Universal Electronics | Sony Group vs. VOXX International | Sony Group vs. Samsung Electronics Co | Sony Group vs. Sharp |
| Casio Computer vs. Apple Inc | Casio Computer vs. Sharp | Casio Computer vs. TCL Electronics Holdings | Casio Computer vs. Xiaomi Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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