Correlation Between HEALTHCARE REAL and Sony Group

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

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

Diversification Opportunities for HEALTHCARE REAL and Sony Group

0.26

Correlation Coefficient

HEALTHCARE REAL  Sony Group

Modest diversification

The 3 months correlation between HEALTHCARE and Sony is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding HEALTHCARE REAL A 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 HEALTHCARE REAL 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 HEALTHCARE REAL A 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 HEALTHCARE REAL i.e., HEALTHCARE REAL and Sony Group go up and down completely randomly.

Pair Corralation between HEALTHCARE REAL and Sony Group

Assuming the 90 days horizon HEALTHCARE REAL A is expected to generate 0.56 times more return on investment than Sony Group. However, HEALTHCARE REAL A is 1.8 times less risky than Sony Group. It trades about -0.1 of its potential returns per unit of risk. Sony Group Corp is currently generating about -0.06 per unit of risk. If you would invest  1,620  in HEALTHCARE REAL A on October 22, 2024 and sell it today you would lose (20.00) from holding HEALTHCARE REAL A or give up 1.23% of portfolio value over 90 days.

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

HEALTHCARE REAL A  vs.  Sony Group Corp

HEALTHCARE REAL A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HEALTHCARE REAL A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, HEALTHCARE REAL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Sony Group Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sony Group Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Sony Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HEALTHCARE REAL and Sony Group

The main advantage of trading using opposite HEALTHCARE REAL and Sony Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEALTHCARE REAL 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 HEALTHCARE REAL A 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.