Correlation Between Sony and Eneva SA

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

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

Diversification Opportunities for Sony and Eneva SA

0.0

Correlation Coefficient

Sony  Eneva SA

Pay attention - limited upside

The 3 months correlation between Sony and Eneva is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group and Eneva SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eneva SA 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 Eneva SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eneva SA has no effect on the direction of Sony i.e., Sony and Eneva SA go up and down completely randomly.

Pair Corralation between Sony and Eneva SA

If you would invest  955.00  in Eneva SA on December 31, 2024 and sell it today you would earn a total of  235.00  from holding Eneva SA or generate 24.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

Sony Group  vs.  Eneva SA

Sony Group

Risk-Adjusted Performance

OK

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

Eneva SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eneva SA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Eneva SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sony and Eneva SA

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

The idea behind Sony Group and Eneva SA 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.