Correlation Between Beyond Meat and Sonos
Can any of the company-specific risk be diversified away by investing in both Beyond Meat 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 Beyond Meat and Sonos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beyond Meat and Sonos Inc, you can compare the effects of market volatilities on Beyond Meat 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 Beyond Meat with a short position of Sonos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Meat and Sonos.
Diversification Opportunities for Beyond Meat and Sonos
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Beyond and Sonos is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Meat and Sonos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonos Inc and Beyond Meat 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 Beyond Meat 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 Beyond Meat i.e., Beyond Meat and Sonos go up and down completely randomly.
Pair Corralation between Beyond Meat and Sonos
Given the investment horizon of 90 days Beyond Meat is expected to under-perform the Sonos. In addition to that, Beyond Meat is 1.75 times more volatile than Sonos Inc. It trades about -0.02 of its total potential returns per unit of risk. Sonos Inc is currently generating about -0.01 per unit of volatility. If you would invest 1,780 in Sonos Inc on August 29, 2024 and sell it today you would lose (463.00) from holding Sonos Inc or give up 26.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beyond Meat vs. Sonos Inc
Performance |
| Timeline |
| Beyond Meat |
| Sonos Inc |
Beyond Meat and Sonos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beyond Meat and Sonos
The main advantage of trading using opposite Beyond Meat and Sonos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Meat 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.| Beyond Meat vs. Kraft Heinz Co | Beyond Meat vs. Hormel Foods | Beyond Meat vs. Kellanova | Beyond Meat vs. General Mills |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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