Correlation Between WonderFi Technologies and Sangoma Technologies

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

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

Diversification Opportunities for WonderFi Technologies and Sangoma Technologies

-0.17

Correlation Coefficient

WonderFi Technologies  Sangoma Technologies

Good diversification

The 3 months correlation between WonderFi and Sangoma is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding WonderFi Technologies and Sangoma Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangoma Technologies Corp and WonderFi Technologies 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 WonderFi Technologies are associated (or correlated) with Sangoma Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangoma Technologies Corp has no effect on the direction of WonderFi Technologies i.e., WonderFi Technologies and Sangoma Technologies go up and down completely randomly.

Pair Corralation between WonderFi Technologies and Sangoma Technologies

Assuming the 90 days trading horizon WonderFi Technologies is expected to under-perform the Sangoma Technologies. In addition to that, WonderFi Technologies is 2.28 times more volatile than Sangoma Technologies Corp. It trades about -0.02 of its total potential returns per unit of risk. Sangoma Technologies Corp is currently generating about 0.03 per unit of volatility. If you would invest  701.00  in Sangoma Technologies Corp on June 9, 2024 and sell it today you would earn a total of  7.00  from holding Sangoma Technologies Corp or generate 1.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

WonderFi Technologies  vs.  Sangoma Technologies Corp

WonderFi Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WonderFi Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in October 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Sangoma Technologies Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sangoma Technologies Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Sangoma Technologies is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with WonderFi Technologies and Sangoma Technologies

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

The idea behind WonderFi Technologies and Sangoma Technologies 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.