Correlation Between Sonos and Singing Machine
Can any of the company-specific risk be diversified away by investing in both Sonos and Singing Machine 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 Singing Machine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonos Inc and The Singing Machine, you can compare the effects of market volatilities on Sonos and Singing Machine 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 Singing Machine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonos and Singing Machine.
Diversification Opportunities for Sonos and Singing Machine
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sonos and Singing is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sonos Inc and The Singing Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singing Machine 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 Singing Machine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singing Machine has no effect on the direction of Sonos i.e., Sonos and Singing Machine go up and down completely randomly.
Pair Corralation between Sonos and Singing Machine
Given the investment horizon of 90 days Sonos Inc is expected to generate 0.41 times more return on investment than Singing Machine. However, Sonos Inc is 2.44 times less risky than Singing Machine. It trades about 0.0 of its potential returns per unit of risk. The Singing Machine is currently generating about 0.0 per unit of risk. If you would invest 2,080 in Sonos Inc on January 30, 2024 and sell it today you would lose (383.00) from holding Sonos Inc or give up 18.41% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sonos Inc vs. The Singing Machine
Performance |
Timeline |
Sonos Inc |
Singing Machine |
Sonos and Singing Machine Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sonos and Singing Machine
The main advantage of trading using opposite Sonos and Singing Machine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonos position performs unexpectedly, Singing Machine 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 Singing Machine will offset losses from the drop in Singing Machine's long position.Sonos vs. Universal Electronics | Sonos vs. VOXX International | Sonos vs. Sharp | Sonos vs. TCL Electronics Holdings |
Singing Machine vs. Universal Electronics | Singing Machine vs. VOXX International | Singing Machine vs. Sharp | Singing Machine vs. TCL Electronics Holdings |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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