Correlation Between Sony and National Bank
Can any of the company-specific risk be diversified away by investing in both Sony and National Bank 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 National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sony Group and National Bank Holdings, you can compare the effects of market volatilities on Sony and National Bank 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 National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony and National Bank.
Diversification Opportunities for Sony and National Bank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sony and National is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group and National Bank Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank Holdings 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank Holdings has no effect on the direction of Sony i.e., Sony and National Bank go up and down completely randomly.
Pair Corralation between Sony and National Bank
If you would invest 3,353 in National Bank Holdings on January 25, 2024 and sell it today you would lose (233.00) from holding National Bank Holdings or give up 6.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Sony Group vs. National Bank Holdings
Performance |
| Timeline |
| Sony Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| National Bank Holdings |
Sony and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sony and National Bank
The main advantage of trading using opposite Sony and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank's long position.The idea behind Sony Group and National Bank Holdings 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.| National Bank vs. Regions Financial | National Bank vs. KeyCorp | National Bank vs. Superior Plus Corp | National Bank vs. Origin Agritech |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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