Correlation Between Bausch Lomb and Sonos
Can any of the company-specific risk be diversified away by investing in both Bausch Lomb 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 Bausch Lomb and Sonos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bausch Lomb Corp and Sonos Inc, you can compare the effects of market volatilities on Bausch Lomb 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 Bausch Lomb with a short position of Sonos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bausch Lomb and Sonos.
Diversification Opportunities for Bausch Lomb and Sonos
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bausch and Sonos is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bausch Lomb Corp and Sonos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonos Inc and Bausch Lomb 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 Bausch Lomb Corp 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 Bausch Lomb i.e., Bausch Lomb and Sonos go up and down completely randomly.
Pair Corralation between Bausch Lomb and Sonos
Given the investment horizon of 90 days Bausch Lomb Corp is expected to generate 0.88 times more return on investment than Sonos. However, Bausch Lomb Corp is 1.14 times less risky than Sonos. It trades about 0.01 of its potential returns per unit of risk. Sonos Inc is currently generating about 0.0 per unit of risk. If you would invest 1,978 in Bausch Lomb Corp on August 28, 2024 and sell it today you would lose (11.00) from holding Bausch Lomb Corp or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bausch Lomb Corp vs. Sonos Inc
Performance |
| Timeline |
| Bausch Lomb Corp |
| Sonos Inc |
Bausch Lomb and Sonos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bausch Lomb and Sonos
The main advantage of trading using opposite Bausch Lomb and Sonos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bausch Lomb 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.| Bausch Lomb vs. The Cooper Companies, | Bausch Lomb vs. ICU Medical | Bausch Lomb vs. Hologic | Bausch Lomb vs. Becton Dickinson and |
| Sonos vs. LG Display Co | Sonos vs. Wearable Devices | Sonos vs. Universal Electronics | Sonos vs. Samsung Electronics Co |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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