Correlation Between Starwin Media and Sonos

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

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

Diversification Opportunities for Starwin Media and Sonos

0.0

Correlation Coefficient

Starwin Media  Sonos

Pay attention - limited upside

The 3 months correlation between Starwin and Sonos is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Starwin Media Holdings and Sonos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonos Inc and Starwin Media 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 Starwin Media Holdings 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 Starwin Media i.e., Starwin Media and Sonos go up and down completely randomly.

Pair Corralation between Starwin Media and Sonos

If you would invest  1,278  in Sonos Inc on October 25, 2024 and sell it today you would earn a total of  136.00  from holding Sonos Inc or generate 10.64% return on investment over 90 days.

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

Starwin Media Holdings  vs.  Sonos Inc

Starwin Media Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Starwin Media Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Starwin Media is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Sonos Inc

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sonos Inc are ranked lower than 6 (%) 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.

Pair Trading with Starwin Media and Sonos

The main advantage of trading using opposite Starwin Media and Sonos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Starwin Media 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 Starwin Media Holdings 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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.