Correlation Between Zepp Health and Sony Group
Can any of the company-specific risk be diversified away by investing in both Zepp Health 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 Zepp Health and Sony Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zepp Health Corp and Sony Group Corp, you can compare the effects of market volatilities on Zepp Health 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 Zepp Health with a short position of Sony Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zepp Health and Sony Group.
Diversification Opportunities for Zepp Health and Sony Group
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zepp and Sony is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Zepp Health Corp 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 Zepp Health 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 Zepp Health Corp 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 Zepp Health i.e., Zepp Health and Sony Group go up and down completely randomly.
Pair Corralation between Zepp Health and Sony Group
Given the investment horizon of 90 days Zepp Health Corp is expected to under-perform the Sony Group. In addition to that, Zepp Health is 2.53 times more volatile than Sony Group Corp. It trades about -0.12 of its total potential returns per unit of risk. Sony Group Corp is currently generating about 0.2 per unit of volatility. If you would invest 1,785 in Sony Group Corp on August 30, 2024 and sell it today you would earn a total of 191.00 from holding Sony Group Corp or generate 10.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zepp Health Corp vs. Sony Group Corp
Performance |
| Timeline |
| Zepp Health Corp |
| Sony Group Corp |
Zepp Health and Sony Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zepp Health and Sony Group
The main advantage of trading using opposite Zepp Health and Sony Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zepp Health 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.| Zepp Health vs. VOXX International | Zepp Health vs. LG Display Co | Zepp Health vs. Vizio Holding Corp | Zepp Health vs. Turtle Beach Corp |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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