Correlation Between Sony and Space

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Can any of the company-specific risk be diversified away by investing in both Sony and Space 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 Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sony Group and Space Com, you can compare the effects of market volatilities on Sony and Space 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 Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony and Space.

Diversification Opportunities for Sony and Space

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Sony and Space

If you would invest  6,070  in Space Com on January 26, 2024 and sell it today you would earn a total of  80.00  from holding Space Com or generate 1.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Sony Group  vs.  Space Com

 Performance 
       Timeline  
Sony Group 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Sony Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Sony is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
Space Com 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Space Com are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Space may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Sony and Space Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sony and Space

The main advantage of trading using opposite Sony and Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony position performs unexpectedly, Space 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 Space will offset losses from the drop in Space's long position.
The idea behind Sony Group and Space Com 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

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