Correlation Between LeapFrog Enterprises and Sony
Can any of the company-specific risk be diversified away by investing in both LeapFrog Enterprises and Sony 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 LeapFrog Enterprises and Sony into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LeapFrog Enterprises and Sony Group, you can compare the effects of market volatilities on LeapFrog Enterprises and Sony 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 LeapFrog Enterprises with a short position of Sony. Check out your portfolio center. Please also check ongoing floating volatility patterns of LeapFrog Enterprises and Sony.
Diversification Opportunities for LeapFrog Enterprises and Sony
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LeapFrog and Sony is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LeapFrog Enterprises and Sony Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Group and LeapFrog Enterprises 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 LeapFrog Enterprises are associated (or correlated) with Sony. 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 has no effect on the direction of LeapFrog Enterprises i.e., LeapFrog Enterprises and Sony go up and down completely randomly.
Pair Corralation between LeapFrog Enterprises and Sony
If you would invest (100.00) in Sony Group on December 29, 2023 and sell it today you would earn a total of 100.00 from holding Sony Group 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 |
LeapFrog Enterprises vs. Sony Group
Performance |
Timeline |
LeapFrog Enterprises |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Sony Group |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
LeapFrog Enterprises and Sony Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LeapFrog Enterprises and Sony
The main advantage of trading using opposite LeapFrog Enterprises and Sony positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LeapFrog Enterprises position performs unexpectedly, Sony 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 will offset losses from the drop in Sony's long position.LeapFrog Enterprises vs. Reservoir Media | LeapFrog Enterprises vs. 51Talk Online Education | LeapFrog Enterprises vs. Pinterest | LeapFrog Enterprises vs. Youdao Inc |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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