Correlation Between Global Partners and Sonos
Can any of the company-specific risk be diversified away by investing in both Global Partners 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 Global Partners and Sonos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Partners LP and Sonos Inc, you can compare the effects of market volatilities on Global Partners 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 Global Partners with a short position of Sonos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Partners and Sonos.
Diversification Opportunities for Global Partners and Sonos
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Sonos is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Global Partners LP and Sonos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonos Inc and Global Partners 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 Global Partners LP 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 Global Partners i.e., Global Partners and Sonos go up and down completely randomly.
Pair Corralation between Global Partners and Sonos
Assuming the 90 days trading horizon Global Partners is expected to generate 3.9 times less return on investment than Sonos. But when comparing it to its historical volatility, Global Partners LP is 11.68 times less risky than Sonos. It trades about 0.17 of its potential returns per unit of risk. Sonos Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,452 in Sonos Inc on October 11, 2024 and sell it today you would earn a total of 23.00 from holding Sonos Inc or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Partners LP vs. Sonos Inc
Performance |
| Timeline |
| Global Partners LP |
| Sonos Inc |
Global Partners and Sonos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Partners and Sonos
The main advantage of trading using opposite Global Partners and Sonos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Partners 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.| Global Partners vs. Sensient Technologies | Global Partners vs. Consol Energy | Global Partners vs. Ecovyst | Global Partners vs. Insteel Industries |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Stocks Directory Find actively traded stocks across global markets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |