Correlation Between Vizio Holding and Sony Group

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

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

Diversification Opportunities for Vizio Holding and Sony Group

-0.88

Correlation Coefficient

Vizio Holding  Sony Group

Pay attention - limited upside

The 3 months correlation between Vizio and Sony is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Vizio Holding Corp and Sony Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Group Corp and Vizio Holding 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 Vizio Holding Corp are associated (or correlated) with Sony Group. 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 Corp has no effect on the direction of Vizio Holding i.e., Vizio Holding and Sony Group go up and down completely randomly.

Pair Corralation between Vizio Holding and Sony Group

Given the investment horizon of 90 days Vizio Holding Corp is expected to generate 0.49 times more return on investment than Sony Group. However, Vizio Holding Corp is 2.04 times less risky than Sony Group. It trades about -0.19 of its potential returns per unit of risk. Sony Group Corp is currently generating about -0.26 per unit of risk. If you would invest  1,093  in Vizio Holding Corp on January 30, 2024 and sell it today you would lose (18.00) from holding Vizio Holding Corp or give up 1.65% of portfolio value over 90 days.

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

Vizio Holding Corp  vs.  Sony Group Corp

Vizio Holding Corp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vizio Holding Corp are ranked lower than 14 (%) 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.

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.

Pair Trading with Vizio Holding and Sony Group

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

The idea behind Vizio Holding Corp and Sony Group 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 Global Correlations module to find global opportunities by holding instruments from different markets.