Correlation Between Roper Technologies, and Sony

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

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

Diversification Opportunities for Roper Technologies, and Sony

-0.46

Correlation Coefficient

Roper Technologies,  Sony

Very good diversification

The 3 months correlation between Roper and Sony is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Roper Technologies, and Sony Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Group and Roper Technologies, 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 Roper Technologies, 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 Roper Technologies, i.e., Roper Technologies, and Sony go up and down completely randomly.

Pair Corralation between Roper Technologies, and Sony

Assuming the 90 days trading horizon Roper Technologies, is expected to generate 18.63 times less return on investment than Sony. But when comparing it to its historical volatility, Roper Technologies, is 260.53 times less risky than Sony. It trades about 0.13 of its potential returns per unit of risk. Sony Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  13,854  in Sony Group on April 20, 2025 and sell it today you would lose (155.00) from holding Sony Group or give up 1.12% of portfolio value over 90 days.

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

Roper Technologies,  vs.  Sony Group

Roper Technologies,

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Roper Technologies, are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Roper Technologies, is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sony Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sony Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Sony is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Roper Technologies, and Sony

The main advantage of trading using opposite Roper Technologies, and Sony positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roper Technologies, 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 Roper Technologies, 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.