Correlation Between Converge Technology and Sonasoft Corp

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

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

Diversification Opportunities for Converge Technology and Sonasoft Corp

0.72

Correlation Coefficient

Converge Technology  Sonasoft Corp

Poor diversification

The 3 months correlation between Converge and Sonasoft is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Converge Technology Solutions and Sonasoft Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonasoft Corp and Converge Technology 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 Converge Technology Solutions are associated (or correlated) with Sonasoft Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonasoft Corp has no effect on the direction of Converge Technology i.e., Converge Technology and Sonasoft Corp go up and down completely randomly.

Pair Corralation between Converge Technology and Sonasoft Corp

If you would invest  0.18  in Sonasoft Corp on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Sonasoft Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.59%
Values	Daily Returns

Converge Technology Solutions  vs.  Sonasoft Corp

Converge Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Converge Technology Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Sonasoft Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sonasoft Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Sonasoft Corp is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Converge Technology and Sonasoft Corp

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

The idea behind Converge Technology Solutions and Sonasoft 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.