Correlation Between VOXX International and Sony Group

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

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

Diversification Opportunities for VOXX International and Sony Group

0.88

Correlation Coefficient

VOXX International  Sony Group

Very poor diversification

The 3 months correlation between VOXX and Sony is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding VOXX International and Sony Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Group Corp and VOXX International 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 VOXX International are associated (or correlated) with Sony Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sony Group Corp has no effect on the direction of VOXX International i.e., VOXX International and Sony Group go up and down completely randomly.

Pair Corralation between VOXX International and Sony Group

Given the investment horizon of 90 days VOXX International is expected to generate 7.03 times less return on investment than Sony Group. But when comparing it to its historical volatility, VOXX International is 6.24 times less risky than Sony Group. It trades about 0.15 of its potential returns per unit of risk. Sony Group Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2,146  in Sony Group Corp on December 27, 2024 and sell it today you would earn a total of  404.00  from holding Sony Group Corp or generate 18.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

VOXX International  vs.  Sony Group Corp

VOXX International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VOXX International are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, VOXX International is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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 13 (%) 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.

Pair Trading with VOXX International and Sony Group

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

The idea behind VOXX International and Sony Group Corp 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.