Correlation Between Universal Electronics and Sony Group
Can any of the company-specific risk be diversified away by investing in both Universal 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 Universal 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 Universal Electronics and Sony Group Corp, you can compare the effects of market volatilities on Universal 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 Universal Electronics with a short position of Sony Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Electronics and Sony Group.
Diversification Opportunities for Universal Electronics and Sony Group
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Universal and Sony is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Universal Electronics 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 Universal 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 Universal Electronics 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 Universal Electronics i.e., Universal Electronics and Sony Group go up and down completely randomly.
Pair Corralation between Universal Electronics and Sony Group
Given the investment horizon of 90 days Universal Electronics is expected to generate 2.96 times more return on investment than Sony Group. However, Universal Electronics is 2.96 times more volatile than Sony Group Corp. It trades about 0.24 of its potential returns per unit of risk. Sony Group Corp is currently generating about 0.16 per unit of risk. If you would invest 816.00 in Universal Electronics on August 26, 2024 and sell it today you would earn a total of 317.00 from holding Universal Electronics or generate 38.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Electronics vs. Sony Group Corp
Performance |
| Timeline |
| Universal Electronics |
| Sony Group Corp |
Universal Electronics and Sony Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Electronics and Sony Group
The main advantage of trading using opposite Universal Electronics and Sony Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal 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.| Universal Electronics vs. LG Display Co | Universal Electronics vs. Vizio Holding Corp | Universal Electronics vs. Zepp Health Corp | Universal Electronics vs. Sonos Inc |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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