Correlation Between Apptech Corp and Sangoma Technologies

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

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

Diversification Opportunities for Apptech Corp and Sangoma Technologies

0.23

Correlation Coefficient

Apptech Corp  Sangoma Technologies

Modest diversification

The 3 months correlation between Apptech and Sangoma is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Apptech Corp 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 Apptech Corp 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 Apptech Corp 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 Apptech Corp i.e., Apptech Corp and Sangoma Technologies go up and down completely randomly.

Pair Corralation between Apptech Corp and Sangoma Technologies

Given the investment horizon of 90 days Apptech Corp is expected to generate 1.45 times more return on investment than Sangoma Technologies. However, Apptech Corp is 1.45 times more volatile than Sangoma Technologies Corp. It trades about 0.03 of its potential returns per unit of risk. Sangoma Technologies Corp is currently generating about -0.3 per unit of risk. If you would invest  42.00  in Apptech Corp on November 28, 2024 and sell it today you would earn a total of  0.00  from holding Apptech Corp or generate 0.0% return on investment over 90 days.

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

Apptech Corp  vs.  Sangoma Technologies Corp

Apptech Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Apptech Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, Apptech Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Sangoma Technologies Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sangoma Technologies Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Sangoma Technologies is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Apptech Corp and Sangoma Technologies

The main advantage of trading using opposite Apptech Corp and Sangoma Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apptech Corp 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 Apptech Corp 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.