Correlation Between Sony and Grupo Aeroportuario

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

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

Diversification Opportunities for Sony and Grupo Aeroportuario

0.0

Correlation Coefficient

Sony  Grupo Aeroportuario

Pay attention - limited upside

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

Pair Corralation between Sony and Grupo Aeroportuario

If you would invest  36,400  in Sony Group on September 12, 2024 and sell it today you would earn a total of  8,100  from holding Sony Group or generate 22.25% return on investment over 90 days.

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

Sony Group  vs.  Grupo Aeroportuario del

Sony Group

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Sony Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very weak primary indicators, Sony displayed solid returns over the last few months and may actually be approaching a breakup point.

Grupo Aeroportuario del

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Aeroportuario del has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Grupo Aeroportuario is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sony and Grupo Aeroportuario

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

The idea behind Sony Group and Grupo Aeroportuario del 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.