Correlation Between SunOpta and Sonos
Can any of the company-specific risk be diversified away by investing in both SunOpta 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 SunOpta and Sonos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and Sonos Inc, you can compare the effects of market volatilities on SunOpta 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 SunOpta with a short position of Sonos. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and Sonos.
Diversification Opportunities for SunOpta and Sonos
Poor diversification
The 3 months correlation between SunOpta and Sonos is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and Sonos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonos Inc and SunOpta 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 SunOpta 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 SunOpta i.e., SunOpta and Sonos go up and down completely randomly.
Pair Corralation between SunOpta and Sonos
Given the investment horizon of 90 days SunOpta is expected to generate 1.08 times more return on investment than Sonos. However, SunOpta is 1.08 times more volatile than Sonos Inc. It trades about 0.39 of its potential returns per unit of risk. Sonos Inc is currently generating about 0.09 per unit of risk. If you would invest 597.00 in SunOpta on August 30, 2024 and sell it today you would earn a total of 184.00 from holding SunOpta or generate 30.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunOpta vs. Sonos Inc
Performance |
| Timeline |
| SunOpta |
| Sonos Inc |
SunOpta and Sonos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunOpta and Sonos
The main advantage of trading using opposite SunOpta and Sonos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta 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.| SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products | SunOpta vs. Associated British Foods |
| Sonos vs. VOXX International | Sonos vs. LG Display Co | Sonos vs. Turtle Beach Corp | Sonos vs. Koss Corporation |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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