Correlation Between Sony Group and Vizio Holding

Can any of the company-specific risk be diversified away by investing in both Sony Group and Vizio Holding 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 Vizio Holding 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 Vizio Holding Corp, you can compare the effects of market volatilities on Sony Group and Vizio Holding 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 Vizio Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony Group and Vizio Holding.

Diversification Opportunities for Sony Group and Vizio Holding

-0.88

Correlation Coefficient

Sony Group  Vizio Holding

Pay attention - limited upside

The 3 months correlation between Sony and Vizio is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group Corp and Vizio Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vizio Holding Corp 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 Vizio Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vizio Holding Corp has no effect on the direction of Sony Group i.e., Sony Group and Vizio Holding go up and down completely randomly.

Pair Corralation between Sony Group and Vizio Holding

Given the investment horizon of 90 days Sony Group Corp is expected to under-perform the Vizio Holding. In addition to that, Sony Group is 2.02 times more volatile than Vizio Holding Corp. It trades about -0.21 of its total potential returns per unit of risk. Vizio Holding Corp is currently generating about -0.14 per unit of volatility. If you would invest  1,093  in Vizio Holding Corp on January 31, 2024 and sell it today you would lose (13.00) from holding Vizio Holding Corp or give up 1.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Sony Group Corp  vs.  Vizio Holding Corp

Sony Group Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sony Group Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Vizio Holding Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vizio Holding Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting forward indicators, Vizio Holding displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sony Group and Vizio Holding

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

The idea behind Sony Group Corp and Vizio Holding Corp 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.