Correlation Between Metalert and Sonim Technologies

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

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

Diversification Opportunities for Metalert and Sonim Technologies

0.8

Correlation Coefficient

Metalert  Sonim Technologies

Very poor diversification

The 3 months correlation between Metalert and Sonim is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Metalert and Sonim Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonim Technologies and Metalert 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 Metalert 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 Metalert i.e., Metalert and Sonim Technologies go up and down completely randomly.

Pair Corralation between Metalert and Sonim Technologies

Given the investment horizon of 90 days Metalert is expected to under-perform the Sonim Technologies. In addition to that, Metalert is 2.07 times more volatile than Sonim Technologies. It trades about -0.08 of its total potential returns per unit of risk. Sonim Technologies is currently generating about -0.12 per unit of volatility. If you would invest  322.00  in Sonim Technologies on December 29, 2024 and sell it today you would lose (99.00) from holding Sonim Technologies or give up 30.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	96.83%
Values	Daily Returns

Metalert  vs.  Sonim Technologies

Metalert

Risk-Adjusted Performance

Very Weak

Over the last 90 days Metalert has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Sonim Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sonim Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Metalert and Sonim Technologies

The main advantage of trading using opposite Metalert and Sonim Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalert 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 Metalert 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.

Check out your portfolio center.

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.