Correlation Between 15089QAN4 and Sonos

Can any of the company-specific risk be diversified away by investing in both 15089QAN4 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 15089QAN4 and Sonos into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CE 633 15 JUL 29 and Sonos Inc, you can compare the effects of market volatilities on 15089QAN4 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 15089QAN4 with a short position of Sonos. Check out your portfolio center. Please also check ongoing floating volatility patterns of 15089QAN4 and Sonos.

Diversification Opportunities for 15089QAN4 and Sonos

-0.51

Correlation Coefficient

15089QAN4  Sonos

Excellent diversification

The 3 months correlation between 15089QAN4 and Sonos is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding CE 633 15 JUL 29 and Sonos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonos Inc and 15089QAN4 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 CE 633 15 JUL 29 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 15089QAN4 i.e., 15089QAN4 and Sonos go up and down completely randomly.

Pair Corralation between 15089QAN4 and Sonos

Assuming the 90 days trading horizon CE 633 15 JUL 29 is expected to generate 0.38 times more return on investment than Sonos. However, CE 633 15 JUL 29 is 2.64 times less risky than Sonos. It trades about -0.08 of its potential returns per unit of risk. Sonos Inc is currently generating about -0.18 per unit of risk. If you would invest  10,176  in CE 633 15 JUL 29 on October 25, 2024 and sell it today you would lose (79.00) from holding CE 633 15 JUL 29 or give up 0.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

CE 633 15 JUL 29  vs.  Sonos Inc

CE 633 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CE 633 15 JUL 29 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 15089QAN4 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Sonos Inc

Risk-Adjusted Performance

6 of 100

Modest

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 15089QAN4 and Sonos

The main advantage of trading using opposite 15089QAN4 and Sonos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 15089QAN4 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 CE 633 15 JUL 29 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 Valuation module to check real value of public entities based on technical and fundamental data.