Correlation Between United Natural and Sony Group
Can any of the company-specific risk be diversified away by investing in both United Natural 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 United Natural and Sony Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Natural Foods and Sony Group Corp, you can compare the effects of market volatilities on United Natural 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 United Natural with a short position of Sony Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Sony Group.
Diversification Opportunities for United Natural and Sony Group
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Sony is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods 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 United Natural 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 United Natural Foods 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 United Natural i.e., United Natural and Sony Group go up and down completely randomly.
Pair Corralation between United Natural and Sony Group
Assuming the 90 days horizon United Natural Foods is expected to under-perform the Sony Group. But the stock apears to be less risky and, when comparing its historical volatility, United Natural Foods is 2.06 times less risky than Sony Group. The stock trades about -0.01 of its potential returns per unit of risk. The Sony Group Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 366.00 in Sony Group Corp on August 27, 2024 and sell it today you would earn a total of 1,464 from holding Sony Group Corp or generate 400.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. Sony Group Corp
Performance |
| Timeline |
| United Natural Foods |
| Sony Group Corp |
United Natural and Sony Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Sony Group
The main advantage of trading using opposite United Natural and Sony Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural 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.| United Natural vs. Lion One Metals | United Natural vs. LION ONE METALS | United Natural vs. GREENX METALS LTD | United Natural vs. Harmony Gold Mining |
| Sony Group vs. CHINA EDUCATION GROUP | Sony Group vs. IDP EDUCATION LTD | Sony Group vs. G8 EDUCATION | Sony Group vs. SEI INVESTMENTS |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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