Correlation Between Sony Group and HEAR Old

Can any of the company-specific risk be diversified away by investing in both Sony Group and HEAR Old 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 HEAR Old 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 HEAR Old, you can compare the effects of market volatilities on Sony Group and HEAR Old 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 HEAR Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony Group and HEAR Old.

Diversification Opportunities for Sony Group and HEAR Old

0.0

Correlation Coefficient

Sony Group  HEAR Old

Pay attention - limited upside

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

Pair Corralation between Sony Group and HEAR Old

If you would invest  2,121  in Sony Group Corp on December 28, 2024 and sell it today you would earn a total of  443.00  from holding Sony Group Corp or generate 20.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sony Group Corp  vs.  HEAR Old

Sony Group Corp

Risk-Adjusted Performance

Good

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

HEAR Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days HEAR Old has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, HEAR Old is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Sony Group and HEAR Old

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

The idea behind Sony Group Corp and HEAR Old 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..