Correlation Between Tesla and Sony Group
Can any of the company-specific risk be diversified away by investing in both Tesla 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 Tesla and Sony Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc and Sony Group, you can compare the effects of market volatilities on Tesla 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 Tesla with a short position of Sony Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and Sony Group.
Diversification Opportunities for Tesla and Sony Group
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tesla and Sony is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and Sony Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Group and Tesla 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 Tesla Inc 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 has no effect on the direction of Tesla i.e., Tesla and Sony Group go up and down completely randomly.
Pair Corralation between Tesla and Sony Group
Assuming the 90 days horizon Tesla Inc is expected to generate 1.83 times more return on investment than Sony Group. However, Tesla is 1.83 times more volatile than Sony Group. It trades about 0.05 of its potential returns per unit of risk. Sony Group is currently generating about 0.03 per unit of risk. If you would invest 17,300 in Tesla Inc on August 24, 2024 and sell it today you would earn a total of 15,195 from holding Tesla Inc or generate 87.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tesla Inc vs. Sony Group
Performance |
| Timeline |
| Tesla Inc |
| Sony Group |
Tesla and Sony Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and Sony Group
The main advantage of trading using opposite Tesla and Sony Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla 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.| Tesla vs. ULTRA CLEAN HLDGS | Tesla vs. ALERION CLEANPOWER | Tesla vs. BOS BETTER ONLINE | Tesla vs. Gruppo Mutuionline SpA |
| Sony Group vs. Amazon Inc | Sony Group vs. Microsoft | Sony Group vs. Tesla Inc | Sony Group vs. Alphabet Class A |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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