Correlation Between Sony Group and Vizio Holding

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Can any of the company-specific risk be diversified away by investing in both Sony Group and Vizio Holding 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 Vizio Holding 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 Vizio Holding Corp, you can compare the effects of market volatilities on Sony Group and Vizio Holding 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 Vizio Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony Group and Vizio Holding.

Diversification Opportunities for Sony Group and Vizio Holding

0.23
  Correlation Coefficient

Modest diversification

The 3 months correlation between Sony and Vizio is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group Corp and Vizio Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vizio Holding 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 Corp are associated (or correlated) with Vizio Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vizio Holding Corp has no effect on the direction of Sony Group i.e., Sony Group and Vizio Holding go up and down completely randomly.

Pair Corralation between Sony Group and Vizio Holding

Given the investment horizon of 90 days Sony Group Corp is expected to generate 4.25 times more return on investment than Vizio Holding. However, Sony Group is 4.25 times more volatile than Vizio Holding Corp. It trades about 0.16 of its potential returns per unit of risk. Vizio Holding Corp is currently generating about 0.1 per unit of risk. If you would invest  1,762  in Sony Group Corp on August 26, 2024 and sell it today you would earn a total of  144.00  from holding Sony Group Corp or generate 8.17% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Sony Group Corp  vs.  Vizio Holding Corp

 Performance 
       Timeline  
Sony Group Corp 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Sony Group Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Sony Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
Vizio Holding Corp 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Vizio Holding Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Vizio Holding is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Sony Group and Vizio Holding Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sony Group and Vizio Holding

The main advantage of trading using opposite Sony Group and Vizio Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony Group position performs unexpectedly, Vizio Holding 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 Vizio Holding will offset losses from the drop in Vizio Holding's long position.
The idea behind Sony Group Corp and Vizio Holding Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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