Correlation Between CVW CleanTech and Sangoma Technologies

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

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

Diversification Opportunities for CVW CleanTech and Sangoma Technologies

0.39

Correlation Coefficient

CVW CleanTech  Sangoma Technologies

Weak diversification

The 3 months correlation between CVW and Sangoma is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding CVW CleanTech 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 CVW CleanTech 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 CVW CleanTech 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 CVW CleanTech i.e., CVW CleanTech and Sangoma Technologies go up and down completely randomly.

Pair Corralation between CVW CleanTech and Sangoma Technologies

Assuming the 90 days horizon CVW CleanTech is expected to generate 14.9 times less return on investment than Sangoma Technologies. But when comparing it to its historical volatility, CVW CleanTech is 1.17 times less risky than Sangoma Technologies. It trades about 0.01 of its potential returns per unit of risk. Sangoma Technologies Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  800.00  in Sangoma Technologies Corp on September 17, 2024 and sell it today you would earn a total of  134.00  from holding Sangoma Technologies Corp or generate 16.75% return on investment over 90 days.

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

CVW CleanTech  vs.  Sangoma Technologies Corp

CVW CleanTech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CVW CleanTech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, CVW CleanTech is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Sangoma Technologies Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sangoma Technologies Corp are ranked lower than 9 (%) 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.

Pair Trading with CVW CleanTech and Sangoma Technologies

The main advantage of trading using opposite CVW CleanTech and Sangoma Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CleanTech 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 CVW CleanTech 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.