Correlation Between Sony and Excelsior Alimentos
Can any of the company-specific risk be diversified away by investing in both Sony and Excelsior Alimentos 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 Sony and Excelsior Alimentos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sony Group and Excelsior Alimentos SA, you can compare the effects of market volatilities on Sony and Excelsior Alimentos 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 Sony with a short position of Excelsior Alimentos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony and Excelsior Alimentos.
Diversification Opportunities for Sony and Excelsior Alimentos
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sony and Excelsior is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group and Excelsior Alimentos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excelsior Alimentos and Sony 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 Sony Group are associated (or correlated) with Excelsior Alimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excelsior Alimentos has no effect on the direction of Sony i.e., Sony and Excelsior Alimentos go up and down completely randomly.
Pair Corralation between Sony and Excelsior Alimentos
Assuming the 90 days trading horizon Sony Group is expected to under-perform the Excelsior Alimentos. In addition to that, Sony is 16.45 times more volatile than Excelsior Alimentos SA. It trades about -0.16 of its total potential returns per unit of risk. Excelsior Alimentos SA is currently generating about -0.23 per unit of volatility. If you would invest 7,849 in Excelsior Alimentos SA on October 26, 2024 and sell it today you would lose (29.00) from holding Excelsior Alimentos SA or give up 0.37% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.0% |
Values | Daily Returns |
Sony Group vs. Excelsior Alimentos SA
Performance |
Timeline |
Sony Group |
Excelsior Alimentos |
Sony and Excelsior Alimentos Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sony and Excelsior Alimentos
The main advantage of trading using opposite Sony and Excelsior Alimentos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony position performs unexpectedly, Excelsior Alimentos 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 Excelsior Alimentos will offset losses from the drop in Excelsior Alimentos' long position.Sony vs. Paycom Software | ||
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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