Correlation Between SOL and Sonic Labs

Can any of the company-specific risk be diversified away by investing in both SOL and Sonic Labs 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 SOL and Sonic Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SOL and Sonic Labs, you can compare the effects of market volatilities on SOL and Sonic Labs 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 SOL with a short position of Sonic Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOL and Sonic Labs.

Diversification Opportunities for SOL and Sonic Labs

0.36

Correlation Coefficient

SOL  Sonic Labs

Weak diversification

The 3 months correlation between SOL and Sonic is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding SOL and Sonic Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonic Labs and SOL 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 SOL are associated (or correlated) with Sonic Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonic Labs has no effect on the direction of SOL i.e., SOL and Sonic Labs go up and down completely randomly.

Pair Corralation between SOL and Sonic Labs

Assuming the 90 days trading horizon SOL is expected to generate 0.57 times more return on investment than Sonic Labs. However, SOL is 1.75 times less risky than Sonic Labs. It trades about 0.11 of its potential returns per unit of risk. Sonic Labs is currently generating about -0.07 per unit of risk. If you would invest  14,928  in SOL on April 25, 2025 and sell it today you would earn a total of  3,988  from holding SOL or generate 26.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

SOL  vs.  Sonic Labs

SOL

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SOL are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, SOL exhibited solid returns over the last few months and may actually be approaching a breakup point.

Sonic Labs

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sonic Labs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for Sonic Labs shareholders.

Pair Trading with SOL and Sonic Labs

The main advantage of trading using opposite SOL and Sonic Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOL position performs unexpectedly, Sonic Labs 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 Sonic Labs will offset losses from the drop in Sonic Labs' long position.

The idea behind SOL and Sonic Labs 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.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.