Correlation Between Sony Corp and Koss

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

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

Diversification Opportunities for Sony Corp and Koss

0.91

Correlation Coefficient

Sony Corp  Koss

Almost no diversification

The 3 months correlation between Sony and Koss is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Sony Corp and Koss Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koss and Sony Corp 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 Corp are associated (or correlated) with Koss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koss has no effect on the direction of Sony Corp i.e., Sony Corp and Koss go up and down completely randomly.

Pair Corralation between Sony Corp and Koss

Assuming the 90 days horizon Sony Corp is expected to generate 0.78 times more return on investment than Koss. However, Sony Corp is 1.28 times less risky than Koss. It trades about -0.11 of its potential returns per unit of risk. Koss Corporation is currently generating about -0.24 per unit of risk. If you would invest  9,494  in Sony Corp on January 31, 2024 and sell it today you would lose (1,235) from holding Sony Corp or give up 13.01% of portfolio value over 90 days.

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

Sony Corp  vs.  Koss Corp.

Sony Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sony Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking indicators remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Koss

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Koss Corporation 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 comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Sony Corp and Koss

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

The idea behind Sony Corp and Koss Corporation 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.

Check out your portfolio center.

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 CEOs Directory module to screen CEOs from public companies around the world.