Correlation Between Metalfrio Solutions and Sony

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

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

Diversification Opportunities for Metalfrio Solutions and Sony

-0.07

Correlation Coefficient

Metalfrio Solutions  Sony

Good diversification

The 3 months correlation between Metalfrio and Sony is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Metalfrio Solutions SA and Sony Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Group and Metalfrio Solutions 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 Metalfrio Solutions SA are associated (or correlated) with Sony. 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 Metalfrio Solutions i.e., Metalfrio Solutions and Sony go up and down completely randomly.

Pair Corralation between Metalfrio Solutions and Sony

Assuming the 90 days trading horizon Metalfrio Solutions SA is expected to generate 2.96 times more return on investment than Sony. However, Metalfrio Solutions is 2.96 times more volatile than Sony Group. It trades about 0.09 of its potential returns per unit of risk. Sony Group is currently generating about 0.1 per unit of risk. If you would invest  22,100  in Metalfrio Solutions SA on December 26, 2024 and sell it today you would earn a total of  4,901  from holding Metalfrio Solutions SA or generate 22.18% return on investment over 90 days.

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

Metalfrio Solutions SA  vs.  Sony Group

Metalfrio Solutions

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Metalfrio Solutions SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Metalfrio Solutions unveiled solid returns over the last few months and may actually be approaching a breakup point.

Sony Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sony Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Sony may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Metalfrio Solutions and Sony

The main advantage of trading using opposite Metalfrio Solutions and Sony positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalfrio Solutions position performs unexpectedly, Sony 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 will offset losses from the drop in Sony's long position.

The idea behind Metalfrio Solutions SA and Sony Group 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.