Correlation Between Xiaomi and Sony Group

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

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

Diversification Opportunities for Xiaomi and Sony Group

-0.45

Correlation Coefficient

Xiaomi  Sony Group

Very good diversification

The 3 months correlation between Xiaomi and Sony is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Xiaomi 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 Xiaomi 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 Xiaomi 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 Xiaomi i.e., Xiaomi and Sony Group go up and down completely randomly.

Pair Corralation between Xiaomi and Sony Group

Assuming the 90 days horizon Xiaomi is expected to generate 1.18 times more return on investment than Sony Group. However, Xiaomi is 1.18 times more volatile than Sony Group Corp. It trades about 0.05 of its potential returns per unit of risk. Sony Group Corp is currently generating about -0.02 per unit of risk. If you would invest  572.00  in Xiaomi on May 7, 2025 and sell it today you would earn a total of  31.00  from holding Xiaomi or generate 5.42% return on investment over 90 days.

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

Xiaomi  vs.  Sony Group Corp

Xiaomi

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Xiaomi are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Xiaomi may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Sony Group Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Sony Group Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Sony Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Xiaomi and Sony Group

The main advantage of trading using opposite Xiaomi and Sony Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiaomi 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 Xiaomi 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.