Correlation Between Vuzix Corp and Sonos

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

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

Diversification Opportunities for Vuzix Corp and Sonos

0.78

Correlation Coefficient

Vuzix Corp  Sonos

Poor diversification

The 3 months correlation between Vuzix and Sonos is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Vuzix Corp Cmn and Sonos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonos Inc and Vuzix Corp 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 Vuzix Corp Cmn 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 Vuzix Corp i.e., Vuzix Corp and Sonos go up and down completely randomly.

Pair Corralation between Vuzix Corp and Sonos

Given the investment horizon of 90 days Vuzix Corp Cmn is expected to under-perform the Sonos. In addition to that, Vuzix Corp is 2.84 times more volatile than Sonos Inc. It trades about -0.11 of its total potential returns per unit of risk. Sonos Inc is currently generating about -0.18 per unit of volatility. If you would invest  1,507  in Sonos Inc on December 28, 2024 and sell it today you would lose (386.00) from holding Sonos Inc or give up 25.61% of portfolio value over 90 days.

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

Vuzix Corp Cmn  vs.  Sonos Inc

Vuzix Corp Cmn

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vuzix Corp Cmn has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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 Vuzix Corp and Sonos

The main advantage of trading using opposite Vuzix Corp and Sonos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vuzix Corp 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 Vuzix Corp Cmn 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.