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

0.25

Correlation Coefficient

Vizio Holding  Sony Group

Modest diversification

The 3 months correlation between Vizio and Sony is 0.25. 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 is expected to generate 3.04 times less return on investment than Sony Group. But when comparing it to its historical volatility, Vizio Holding Corp is 3.92 times less risky than Sony Group. It trades about 0.03 of its potential returns per unit of risk. Sony Group Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,951  in Sony Group Corp on August 30, 2024 and sell it today you would earn a total of  25.00  from holding Sony Group Corp or generate 1.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Vizio Holding Corp  vs.  Sony Group Corp

Vizio Holding Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vizio Holding Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Vizio Holding is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Sony Group Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sony Group Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Sony Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.