Correlation Between Sonos and Sharp

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

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

Diversification Opportunities for Sonos and Sharp

-0.67

Correlation Coefficient

Sonos  Sharp

Excellent diversification

The 3 months correlation between Sonos and Sharp is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sonos Inc and Sharp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharp 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 Sharp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharp has no effect on the direction of Sonos i.e., Sonos and Sharp go up and down completely randomly.

Pair Corralation between Sonos and Sharp

Given the investment horizon of 90 days Sonos Inc is expected to under-perform the Sharp. In addition to that, Sonos is 1.61 times more volatile than Sharp. It trades about -0.01 of its total potential returns per unit of risk. Sharp is currently generating about 0.0 per unit of volatility. If you would invest  703.00  in Sharp on December 2, 2024 and sell it today you would lose (76.00) from holding Sharp or give up 10.81% of portfolio value over 90 days.

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

Sonos Inc  vs.  Sharp

Sonos Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sonos Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Sonos is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Sharp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sharp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Sharp may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Sonos and Sharp

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

The idea behind Sonos Inc and Sharp 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..