Correlation Between Sony Group and Wearable Devices
Can any of the company-specific risk be diversified away by investing in both Sony Group and Wearable Devices 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 Wearable Devices 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 Wearable Devices, you can compare the effects of market volatilities on Sony Group and Wearable Devices 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 Wearable Devices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony Group and Wearable Devices.
Diversification Opportunities for Sony Group and Wearable Devices
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sony and Wearable is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group Corp and Wearable Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wearable Devices 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 Wearable Devices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wearable Devices has no effect on the direction of Sony Group i.e., Sony Group and Wearable Devices go up and down completely randomly.
Pair Corralation between Sony Group and Wearable Devices
Given the investment horizon of 90 days Sony Group Corp is expected to generate 0.08 times more return on investment than Wearable Devices. However, Sony Group Corp is 12.44 times less risky than Wearable Devices. It trades about 0.1 of its potential returns per unit of risk. Wearable Devices is currently generating about -0.04 per unit of risk. If you would invest 2,132 in Sony Group Corp on November 4, 2024 and sell it today you would earn a total of 69.00 from holding Sony Group Corp or generate 3.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 85.0% |
| Values | Daily Returns |
Sony Group Corp vs. Wearable Devices
Performance |
| Timeline |
| Sony Group Corp |
| Wearable Devices |
Sony Group and Wearable Devices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sony Group and Wearable Devices
The main advantage of trading using opposite Sony Group and Wearable Devices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony Group position performs unexpectedly, Wearable Devices 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 Wearable Devices will offset losses from the drop in Wearable Devices' long position.| Sony Group vs. Universal Electronics | Sony Group vs. VOXX International | Sony Group vs. Samsung Electronics Co | Sony Group vs. Sharp |
| Wearable Devices vs. Wearable Devices | Wearable Devices vs. Yoshiharu Global Co | Wearable Devices vs. bioAffinity Technologies, |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |