Correlation Between Sony and Harman International

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

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

Diversification Opportunities for Sony and Harman International

0.0

Correlation Coefficient

Sony  Harman International

Pay attention - limited upside

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

Pair Corralation between Sony and Harman International

If you would invest (100.00) in Harman International Industries on February 22, 2024 and sell it today you would earn a total of  100.00  from holding Harman International Industries or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sony Group  vs.  Harman International Industrie

Sony Group

Risk-Adjusted Performance

0 of 100

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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Harman International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harman International Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Harman International is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Sony and Harman International

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

The idea behind Sony Group and Harman International Industries 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.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.