Correlation Between Sony Group and GREENX METALS

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

Diversification Opportunities for Sony Group and GREENX METALS

0.33
  Correlation Coefficient

Weak diversification

The 3 months correlation between Sony and GREENX is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group Corp and GREENX METALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENX METALS LTD and Sony Group 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 Corp are associated (or correlated) with GREENX METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENX METALS LTD has no effect on the direction of Sony Group i.e., Sony Group and GREENX METALS go up and down completely randomly.

Pair Corralation between Sony Group and GREENX METALS

Assuming the 90 days trading horizon Sony Group Corp is expected to under-perform the GREENX METALS. But the stock apears to be less risky and, when comparing its historical volatility, Sony Group Corp is 3.14 times less risky than GREENX METALS. The stock trades about -0.38 of its potential returns per unit of risk. The GREENX METALS LTD is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  63.00  in GREENX METALS LTD on November 30, 2023 and sell it today you would lose (3.00) from holding GREENX METALS LTD or give up 4.76% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Sony Group Corp  vs.  GREENX METALS LTD

 Performance 
       Timeline  
Sony Group Corp 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Sony Group Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Sony Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
GREENX METALS LTD 

Risk-Adjusted Performance

4 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in GREENX METALS LTD are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, GREENX METALS reported solid returns over the last few months and may actually be approaching a breakup point.

Sony Group and GREENX METALS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sony Group and GREENX METALS

The main advantage of trading using opposite Sony Group and GREENX METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony Group position performs unexpectedly, GREENX METALS 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 GREENX METALS will offset losses from the drop in GREENX METALS's long position.
The idea behind Sony Group Corp and GREENX METALS LTD 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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