Correlation Between Solo Brands and Turtle Beach

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

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

Diversification Opportunities for Solo Brands and Turtle Beach

-0.37

Correlation Coefficient

Solo Brands  Turtle Beach

Very good diversification

The 3 months correlation between Solo and Turtle is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Solo Brands and Turtle Beach Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turtle Beach Corp and Solo Brands 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 Solo Brands are associated (or correlated) with Turtle Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turtle Beach Corp has no effect on the direction of Solo Brands i.e., Solo Brands and Turtle Beach go up and down completely randomly.

Pair Corralation between Solo Brands and Turtle Beach

Considering the 90-day investment horizon Solo Brands is expected to under-perform the Turtle Beach. In addition to that, Solo Brands is 1.46 times more volatile than Turtle Beach Corp. It trades about -0.04 of its total potential returns per unit of risk. Turtle Beach Corp is currently generating about 0.06 per unit of volatility. If you would invest  876.00  in Turtle Beach Corp on October 27, 2024 and sell it today you would earn a total of  871.00  from holding Turtle Beach Corp or generate 99.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.77%
Values	Daily Returns

Solo Brands  vs.  Turtle Beach Corp

Solo Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Solo Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Turtle Beach Corp

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Turtle Beach Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Turtle Beach is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Solo Brands and Turtle Beach

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

The idea behind Solo Brands and Turtle Beach 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.