Correlation Between Sonix Technology and Scan D

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

By analyzing existing cross correlation between Sonix Technology Co and Scan D, you can compare the effects of market volatilities on Sonix Technology and Scan D 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 Sonix Technology with a short position of Scan D. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonix Technology and Scan D.

Diversification Opportunities for Sonix Technology and Scan D

0.76

Correlation Coefficient

Sonix Technology  Scan D

Poor diversification

The 3 months correlation between Sonix and Scan is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Sonix Technology Co and Scan D in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scan D and Sonix Technology 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 Sonix Technology Co are associated (or correlated) with Scan D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scan D has no effect on the direction of Sonix Technology i.e., Sonix Technology and Scan D go up and down completely randomly.

Pair Corralation between Sonix Technology and Scan D

Assuming the 90 days trading horizon Sonix Technology Co is expected to generate 0.59 times more return on investment than Scan D. However, Sonix Technology Co is 1.71 times less risky than Scan D. It trades about -0.15 of its potential returns per unit of risk. Scan D is currently generating about -0.13 per unit of risk. If you would invest  4,250  in Sonix Technology Co on October 8, 2024 and sell it today you would lose (260.00) from holding Sonix Technology Co or give up 6.12% of portfolio value over 90 days.

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

Sonix Technology Co  vs.  Scan D

Sonix Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sonix Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Scan D

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Scan D has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Sonix Technology and Scan D

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

The idea behind Sonix Technology Co and Scan D 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.