Correlation Between Sonos and Fair Isaac

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

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

Diversification Opportunities for Sonos and Fair Isaac

-0.11

Correlation Coefficient

Sonos  Fair Isaac

Good diversification

The 3 months correlation between Sonos and Fair is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sonos Inc and Fair Isaac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fair Isaac and Sonos 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 Sonos Inc are associated (or correlated) with Fair Isaac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fair Isaac has no effect on the direction of Sonos i.e., Sonos and Fair Isaac go up and down completely randomly.

Pair Corralation between Sonos and Fair Isaac

Given the investment horizon of 90 days Sonos Inc is expected to under-perform the Fair Isaac. In addition to that, Sonos is 1.56 times more volatile than Fair Isaac. It trades about 0.0 of its total potential returns per unit of risk. Fair Isaac is currently generating about 0.12 per unit of volatility. If you would invest  67,345  in Fair Isaac on October 26, 2024 and sell it today you would earn a total of  113,878  from holding Fair Isaac or generate 169.1% return on investment over 90 days.

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

Sonos Inc  vs.  Fair Isaac

Sonos Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sonos Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Sonos may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Fair Isaac

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fair Isaac has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Sonos and Fair Isaac

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

The idea behind Sonos Inc and Fair Isaac 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.

Check out your portfolio center.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.