Correlation Between Boeing and Sonos

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

By analyzing existing cross correlation between Boeing Co 2196 and Sonos Inc, you can compare the effects of market volatilities on Boeing 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 Boeing with a short position of Sonos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Sonos.

Diversification Opportunities for Boeing and Sonos

-0.53

Correlation Coefficient

Boeing  Sonos

Excellent diversification

The 3 months correlation between Boeing and Sonos is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Boeing Co 2196 and Sonos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonos Inc and Boeing 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 Boeing Co 2196 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 Boeing i.e., Boeing and Sonos go up and down completely randomly.

Pair Corralation between Boeing and Sonos

Assuming the 90 days trading horizon Boeing Co 2196 is expected to generate 0.15 times more return on investment than Sonos. However, Boeing Co 2196 is 6.54 times less risky than Sonos. It trades about 0.06 of its potential returns per unit of risk. Sonos Inc is currently generating about -0.13 per unit of risk. If you would invest  9,506  in Boeing Co 2196 on December 22, 2024 and sell it today you would earn a total of  138.00  from holding Boeing Co 2196 or generate 1.45% return on investment over 90 days.

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

Boeing Co 2196  vs.  Sonos Inc

Boeing Co 2196

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Boeing Co 2196 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Boeing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Boeing and Sonos

The main advantage of trading using opposite Boeing and Sonos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing 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 Boeing Co 2196 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.