Correlation Between TCL Electronics and Sony Group

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

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

Diversification Opportunities for TCL Electronics and Sony Group

0.03

Correlation Coefficient

TCL Electronics  Sony Group

Significant diversification

The 3 months correlation between TCL and Sony is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding TCL Electronics Holdings 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 TCL Electronics 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 TCL Electronics Holdings 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 TCL Electronics i.e., TCL Electronics and Sony Group go up and down completely randomly.

Pair Corralation between TCL Electronics and Sony Group

Assuming the 90 days horizon TCL Electronics is expected to generate 7.29 times less return on investment than Sony Group. In addition to that, TCL Electronics is 3.33 times more volatile than Sony Group Corp. It trades about 0.01 of its total potential returns per unit of risk. Sony Group Corp is currently generating about 0.15 per unit of volatility. If you would invest  2,407  in Sony Group Corp on July 19, 2025 and sell it today you would earn a total of  483.00  from holding Sony Group Corp or generate 20.07% return on investment over 90 days.

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

TCL Electronics Holdings  vs.  Sony Group Corp

TCL Electronics Holdings

Risk-Adjusted Performance

Weakest

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

Sony Group Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sony Group Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Sony Group showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TCL Electronics and Sony Group

The main advantage of trading using opposite TCL Electronics and Sony Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TCL Electronics 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 TCL Electronics Holdings 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.