Correlation Between Koss and Sony Corp

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

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

Diversification Opportunities for Koss and Sony Corp

-0.55

Correlation Coefficient

Koss  Sony Corp

Excellent diversification

The 3 months correlation between Koss and Sony is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Koss Corp. and Sony Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Corp and Koss 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 Koss Corporation are associated (or correlated) with Sony Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sony Corp has no effect on the direction of Koss i.e., Koss and Sony Corp go up and down completely randomly.

Pair Corralation between Koss and Sony Corp

Given the investment horizon of 90 days Koss Corporation is expected to under-perform the Sony Corp. In addition to that, Koss is 1.22 times more volatile than Sony Corp. It trades about -0.09 of its total potential returns per unit of risk. Sony Corp is currently generating about 0.14 per unit of volatility. If you would invest  2,000  in Sony Corp on November 28, 2024 and sell it today you would earn a total of  500.00  from holding Sony Corp or generate 25.0% return on investment over 90 days.

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

Koss Corp.  vs.  Sony Corp

Koss

Risk-Adjusted Performance

Very Weak

Over the last 90 days Koss Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Sony Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sony Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting forward-looking indicators, Sony Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Koss and Sony Corp

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

The idea behind Koss Corporation and Sony 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.