Correlation Between Sony and Koninklijke Philips
Can any of the company-specific risk be diversified away by investing in both Sony and Koninklijke Philips 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 Koninklijke Philips into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sony Group and Koninklijke Philips NV, you can compare the effects of market volatilities on Sony and Koninklijke Philips 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 Koninklijke Philips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony and Koninklijke Philips.
Diversification Opportunities for Sony and Koninklijke Philips
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sony and Koninklijke is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group and Koninklijke Philips NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Philips 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 Koninklijke Philips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Philips has no effect on the direction of Sony i.e., Sony and Koninklijke Philips go up and down completely randomly.
Pair Corralation between Sony and Koninklijke Philips
If you would invest 1,883 in Koninklijke Philips NV on January 19, 2024 and sell it today you would earn a total of 132.00 from holding Koninklijke Philips NV or generate 7.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Sony Group vs. Koninklijke Philips NV
Performance |
Timeline |
Sony Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Koninklijke Philips |
Sony and Koninklijke Philips Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sony and Koninklijke Philips
The main advantage of trading using opposite Sony and Koninklijke Philips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony position performs unexpectedly, Koninklijke Philips 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 Koninklijke Philips will offset losses from the drop in Koninklijke Philips' long position.Sony vs. Alto Ingredients | Sony vs. Avient Corp | Sony vs. National Beverage Corp | Sony vs. Fresh Grapes LLC |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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