Correlation Between Sony and Banco Actinver

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

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

Diversification Opportunities for Sony and Banco Actinver

0.32

Correlation Coefficient

Sony  Banco Actinver

Weak diversification

The 3 months correlation between Sony and Banco is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group and Banco Actinver SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Actinver 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 Banco Actinver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Actinver SA has no effect on the direction of Sony i.e., Sony and Banco Actinver go up and down completely randomly.

Pair Corralation between Sony and Banco Actinver

Assuming the 90 days trading horizon Sony Group is expected to generate 1.35 times more return on investment than Banco Actinver. However, Sony is 1.35 times more volatile than Banco Actinver SA. It trades about 0.16 of its potential returns per unit of risk. Banco Actinver SA is currently generating about -0.1 per unit of risk. If you would invest  43,600  in Sony Group on December 28, 2024 and sell it today you would earn a total of  6,900  from holding Sony Group or generate 15.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.16%
Values	Daily Returns

Sony Group  vs.  Banco Actinver SA

Sony Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sony Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Sony displayed solid returns over the last few months and may actually be approaching a breakup point.

Banco Actinver SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Banco Actinver SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Sony and Banco Actinver

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

The idea behind Sony Group and Banco Actinver 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.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.