Correlation Between TCL Electronics and Sony Group
Can any of the company-specific risk be diversified away by investing in both TCL Electronics and Sony Group 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 TCL Electronics and Sony Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TCL Electronics Holdings and Sony Group Corp, you can compare the effects of market volatilities on TCL Electronics and Sony Group 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 TCL Electronics with a short position of Sony Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of TCL Electronics and Sony Group.
Diversification Opportunities for TCL Electronics and Sony Group
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TCL and Sony is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding TCL Electronics Holdings and Sony Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Group Corp and TCL Electronics 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 TCL Electronics Holdings are associated (or correlated) with Sony Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sony Group Corp has no effect on the direction of TCL Electronics i.e., TCL Electronics and Sony Group go up and down completely randomly.
Pair Corralation between TCL Electronics and Sony Group
Assuming the 90 days horizon TCL Electronics Holdings is expected to generate 3.21 times more return on investment than Sony Group. However, TCL Electronics is 3.21 times more volatile than Sony Group Corp. It trades about 0.09 of its potential returns per unit of risk. Sony Group Corp is currently generating about 0.03 per unit of risk. If you would invest 34.00 in TCL Electronics Holdings on August 26, 2024 and sell it today you would earn a total of 33.00 from holding TCL Electronics Holdings or generate 97.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 75.5% |
| Values | Daily Returns |
TCL Electronics Holdings vs. Sony Group Corp
Performance |
| Timeline |
| TCL Electronics Holdings |
| Sony Group Corp |
TCL Electronics and Sony Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TCL Electronics and Sony Group
The main advantage of trading using opposite TCL Electronics and Sony Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TCL Electronics position performs unexpectedly, Sony Group 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 Sony Group will offset losses from the drop in Sony Group's long position.| TCL Electronics vs. Apple Inc | TCL Electronics vs. Xiaomi Corp | TCL Electronics vs. Samsung Electronics Co | TCL Electronics vs. LG Display Co |
| Sony Group vs. Universal Electronics | Sony Group vs. Vizio Holding Corp | Sony Group vs. VOXX International | Sony Group vs. Samsung Electronics Co |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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