Correlation Between BeWhere Holdings and Sonim Technologies

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

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

Diversification Opportunities for BeWhere Holdings and Sonim Technologies

0.61

Correlation Coefficient

BeWhere Holdings  Sonim Technologies

Poor diversification

The 3 months correlation between BeWhere and Sonim is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding BeWhere Holdings and Sonim Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonim Technologies and BeWhere Holdings 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 BeWhere Holdings are associated (or correlated) with Sonim Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonim Technologies has no effect on the direction of BeWhere Holdings i.e., BeWhere Holdings and Sonim Technologies go up and down completely randomly.

Pair Corralation between BeWhere Holdings and Sonim Technologies

Assuming the 90 days horizon BeWhere Holdings is expected to generate 8.71 times less return on investment than Sonim Technologies. In addition to that, BeWhere Holdings is 1.24 times more volatile than Sonim Technologies. It trades about 0.01 of its total potential returns per unit of risk. Sonim Technologies is currently generating about 0.13 per unit of volatility. If you would invest  246.00  in Sonim Technologies on September 4, 2024 and sell it today you would earn a total of  86.00  from holding Sonim Technologies or generate 34.96% return on investment over 90 days.

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

BeWhere Holdings  vs.  Sonim Technologies

BeWhere Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Sonim Technologies

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sonim Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Sonim Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BeWhere Holdings and Sonim Technologies

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

The idea behind BeWhere Holdings and Sonim Technologies 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.