Correlation Between Sony Group and ANGANG STEEL

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

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

Diversification Opportunities for Sony Group and ANGANG STEEL

0.02

Correlation Coefficient

Sony Group  ANGANG STEEL

Significant diversification

The 3 months correlation between Sony and ANGANG is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group Corp and ANGANG STEEL H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGANG STEEL H and Sony Group 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 Corp are associated (or correlated) with ANGANG STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGANG STEEL H has no effect on the direction of Sony Group i.e., Sony Group and ANGANG STEEL go up and down completely randomly.

Pair Corralation between Sony Group and ANGANG STEEL

Assuming the 90 days trading horizon Sony Group Corp is expected to generate 1.87 times more return on investment than ANGANG STEEL. However, Sony Group is 1.87 times more volatile than ANGANG STEEL H . It trades about 0.07 of its potential returns per unit of risk. ANGANG STEEL H is currently generating about 0.01 per unit of risk. If you would invest  699.00  in Sony Group Corp on October 27, 2024 and sell it today you would earn a total of  1,284  from holding Sony Group Corp or generate 183.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.68%
Values	Daily Returns

Sony Group Corp  vs.  ANGANG STEEL H

Sony Group Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sony Group Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Sony Group sustained solid returns over the last few months and may actually be approaching a breakup point.

ANGANG STEEL H

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ANGANG STEEL H are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, ANGANG STEEL is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Sony Group and ANGANG STEEL

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

The idea behind Sony Group Corp and ANGANG STEEL H 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 Transaction History module to view history of all your transactions and understand their impact on performance.