Correlation Between Dogness International and Sony Group

Can any of the company-specific risk be diversified away by investing in both Dogness International 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 Dogness International and Sony Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dogness International Corp and Sony Group Corp, you can compare the effects of market volatilities on Dogness International 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 Dogness International with a short position of Sony Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dogness International and Sony Group.

Diversification Opportunities for Dogness International and Sony Group

-0.62

Correlation Coefficient

Dogness International  Sony Group

Excellent diversification

The 3 months correlation between Dogness and Sony is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Dogness International 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 Dogness International 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 Dogness International 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 Dogness International i.e., Dogness International and Sony Group go up and down completely randomly.

Pair Corralation between Dogness International and Sony Group

Given the investment horizon of 90 days Dogness International is expected to generate 2.89 times less return on investment than Sony Group. In addition to that, Dogness International is 6.87 times more volatile than Sony Group Corp. It trades about 0.01 of its total potential returns per unit of risk. Sony Group Corp is currently generating about 0.16 per unit of volatility. If you would invest  2,121  in Sony Group Corp on December 28, 2024 and sell it today you would earn a total of  381.00  from holding Sony Group Corp or generate 17.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Dogness International Corp  vs.  Sony Group Corp

Dogness International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dogness International Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Dogness International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sony Group Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sony Group Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Sony Group showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dogness International and Sony Group

The main advantage of trading using opposite Dogness International and Sony Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dogness International 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.

The idea behind Dogness International Corp and Sony Group Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.