Correlation Between Flexible Solutions and Sony

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

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

Diversification Opportunities for Flexible Solutions and Sony

0.0

Correlation Coefficient

Flexible Solutions  Sony

Pay attention - limited upside

The 3 months correlation between Flexible and Sony is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Solutions Internation and Sony Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Group and Flexible Solutions 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 Flexible Solutions International 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 Flexible Solutions i.e., Flexible Solutions and Sony go up and down completely randomly.

Pair Corralation between Flexible Solutions and Sony

If you would invest  233.00  in Flexible Solutions International on February 5, 2024 and sell it today you would lose (21.00) from holding Flexible Solutions International or give up 9.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Flexible Solutions Internation  vs.  Sony Group

Flexible Solutions

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Flexible Solutions International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Flexible Solutions demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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

Pair Trading with Flexible Solutions and Sony

The main advantage of trading using opposite Flexible Solutions and Sony positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexible Solutions 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.

The idea behind Flexible Solutions International and Sony Group 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.