Correlation Between Integral and Sonos

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

By analyzing existing cross correlation between Integral Ad Science and Sonos Inc, you can compare the effects of market volatilities on Integral and Sonos 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 Integral with a short position of Sonos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integral and Sonos.

Diversification Opportunities for Integral and Sonos

0.08

Correlation Coefficient

Integral  Sonos

Significant diversification

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

Pair Corralation between Integral and Sonos

Considering the 90-day investment horizon Integral is expected to generate 3.12 times less return on investment than Sonos. In addition to that, Integral is 1.16 times more volatile than Sonos Inc. It trades about 0.05 of its total potential returns per unit of risk. Sonos Inc is currently generating about 0.17 per unit of volatility. If you would invest  1,189  in Sonos Inc on October 7, 2024 and sell it today you would earn a total of  319.00  from holding Sonos Inc or generate 26.83% return on investment over 90 days.

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

Integral Ad Science  vs.  Sonos Inc

Integral Ad Science

Risk-Adjusted Performance

3 of 100

Insignificant

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

Sonos Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sonos Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Sonos displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Integral and Sonos

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

The idea behind Integral Ad Science and Sonos Inc 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.