Correlation Between Sony Group and Taiyo Yuden

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

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

Diversification Opportunities for Sony Group and Taiyo Yuden

-0.08

Correlation Coefficient

Sony Group  Taiyo Yuden

Good diversification

The 3 months correlation between Sony and Taiyo is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group Corp and Taiyo Yuden Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiyo Yuden and Sony Group 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 Group Corp are associated (or correlated) with Taiyo Yuden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiyo Yuden has no effect on the direction of Sony Group i.e., Sony Group and Taiyo Yuden go up and down completely randomly.

Pair Corralation between Sony Group and Taiyo Yuden

Given the investment horizon of 90 days Sony Group Corp is expected to under-perform the Taiyo Yuden. But the stock apears to be less risky and, when comparing its historical volatility, Sony Group Corp is 1.93 times less risky than Taiyo Yuden. The stock trades about 0.0 of its potential returns per unit of risk. The Taiyo Yuden Co is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  5,923  in Taiyo Yuden Co on May 7, 2025 and sell it today you would earn a total of  1,673  from holding Taiyo Yuden Co or generate 28.25% return on investment over 90 days.

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

Sony Group Corp  vs.  Taiyo Yuden Co

Sony Group Corp

Risk-Adjusted Performance

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 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.

Taiyo Yuden

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Taiyo Yuden Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Taiyo Yuden showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sony Group and Taiyo Yuden

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

The idea behind Sony Group Corp and Taiyo Yuden Co 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.