Correlation Between Sonos and MCBC Holdings

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

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

Diversification Opportunities for Sonos and MCBC Holdings

0.72

Correlation Coefficient

Sonos  MCBC Holdings

Poor diversification

The 3 months correlation between Sonos and MCBC is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sonos Inc and MCBC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCBC Holdings 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 MCBC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCBC Holdings has no effect on the direction of Sonos i.e., Sonos and MCBC Holdings go up and down completely randomly.

Pair Corralation between Sonos and MCBC Holdings

Given the investment horizon of 90 days Sonos Inc is expected to generate 1.22 times more return on investment than MCBC Holdings. However, Sonos is 1.22 times more volatile than MCBC Holdings. It trades about 0.12 of its potential returns per unit of risk. MCBC Holdings is currently generating about 0.08 per unit of risk. If you would invest  897.00  in Sonos Inc on May 7, 2025 and sell it today you would earn a total of  190.00  from holding Sonos Inc or generate 21.18% return on investment over 90 days.

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

Sonos Inc  vs.  MCBC Holdings

Sonos Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sonos Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Sonos displayed solid returns over the last few months and may actually be approaching a breakup point.

MCBC Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MCBC Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, MCBC Holdings may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Sonos and MCBC Holdings

The main advantage of trading using opposite Sonos and MCBC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonos position performs unexpectedly, MCBC Holdings 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 MCBC Holdings will offset losses from the drop in MCBC Holdings' long position.

The idea behind Sonos Inc and MCBC Holdings 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.