Correlation Between Sonos and Lion One
Can any of the company-specific risk be diversified away by investing in both Sonos and Lion One 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 Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonos Inc and Lion One Metals, you can compare the effects of market volatilities on Sonos and Lion One 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 Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonos and Lion One.
Diversification Opportunities for Sonos and Lion One
Pay attention - limited upside
The 3 months correlation between Sonos and Lion is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Sonos Inc and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of Sonos i.e., Sonos and Lion One go up and down completely randomly.
Pair Corralation between Sonos and Lion One
Given the investment horizon of 90 days Sonos Inc is expected to under-perform the Lion One. But the stock apears to be less risky and, when comparing its historical volatility, Sonos Inc is 3.89 times less risky than Lion One. The stock trades about -0.06 of its potential returns per unit of risk. The Lion One Metals is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Lion One Metals on October 23, 2024 and sell it today you would earn a total of 3.00 from holding Lion One Metals or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Sonos Inc vs. Lion One Metals
Performance |
| Timeline |
| Sonos Inc |
| Lion One Metals |
Sonos and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonos and Lion One
The main advantage of trading using opposite Sonos and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonos position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One's long position.The idea behind Sonos Inc and Lion One Metals 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.| Lion One vs. Irving Resources | Lion One vs. Headwater Gold | Lion One vs. Novo Resources Corp | Lion One vs. Snowline Gold Corp |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |