Correlation Between Sangoma Technologies and Sabio Holdings

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

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

Diversification Opportunities for Sangoma Technologies and Sabio Holdings

-0.37

Correlation Coefficient

Sangoma Technologies  Sabio Holdings

Very good diversification

The 3 months correlation between Sangoma and Sabio is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sangoma Technologies Corp and Sabio Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabio Holdings and Sangoma 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 Sangoma Technologies Corp are associated (or correlated) with Sabio Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabio Holdings has no effect on the direction of Sangoma Technologies i.e., Sangoma Technologies and Sabio Holdings go up and down completely randomly.

Pair Corralation between Sangoma Technologies and Sabio Holdings

Assuming the 90 days trading horizon Sangoma Technologies Corp is expected to generate 0.75 times more return on investment than Sabio Holdings. However, Sangoma Technologies Corp is 1.33 times less risky than Sabio Holdings. It trades about 0.18 of its potential returns per unit of risk. Sabio Holdings is currently generating about -0.25 per unit of risk. If you would invest  880.00  in Sangoma Technologies Corp on September 20, 2024 and sell it today you would earn a total of  98.00  from holding Sangoma Technologies Corp or generate 11.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Sangoma Technologies Corp  vs.  Sabio Holdings

Sangoma Technologies Corp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sangoma Technologies Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Sangoma Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Sabio Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sabio Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal forward indicators, Sabio Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Sangoma Technologies and Sabio Holdings

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

The idea behind Sangoma Technologies Corp and Sabio Holdings 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.