Correlation Between Sonos and Acushnet Holdings
Can any of the company-specific risk be diversified away by investing in both Sonos and Acushnet 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 Acushnet 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 Acushnet Holdings Corp, you can compare the effects of market volatilities on Sonos and Acushnet 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 Acushnet Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonos and Acushnet Holdings.
Diversification Opportunities for Sonos and Acushnet Holdings
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sonos and Acushnet is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sonos Inc and Acushnet Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acushnet Holdings Corp 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 Acushnet Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acushnet Holdings Corp has no effect on the direction of Sonos i.e., Sonos and Acushnet Holdings go up and down completely randomly.
Pair Corralation between Sonos and Acushnet Holdings
Given the investment horizon of 90 days Sonos is expected to generate 2.96 times less return on investment than Acushnet Holdings. In addition to that, Sonos is 1.35 times more volatile than Acushnet Holdings Corp. It trades about 0.01 of its total potential returns per unit of risk. Acushnet Holdings Corp is currently generating about 0.02 per unit of volatility. If you would invest 6,173 in Acushnet Holdings Corp on November 9, 2024 and sell it today you would earn a total of 398.00 from holding Acushnet Holdings Corp or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonos Inc vs. Acushnet Holdings Corp
Performance |
| Timeline |
| Sonos Inc |
| Acushnet Holdings Corp |
Sonos and Acushnet Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonos and Acushnet Holdings
The main advantage of trading using opposite Sonos and Acushnet Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonos position performs unexpectedly, Acushnet 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 Acushnet Holdings will offset losses from the drop in Acushnet Holdings' long position.The idea behind Sonos Inc and Acushnet Holdings Corp 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.| Acushnet Holdings vs. YETI Holdings | Acushnet Holdings vs. Madison Square Garden | Acushnet Holdings vs. Six Flags Entertainment | Acushnet Holdings vs. Johnson Outdoors |
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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