Correlation Between Sangoma Technologies and Remitly Global

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

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

Diversification Opportunities for Sangoma Technologies and Remitly Global

0.86

Correlation Coefficient

Sangoma Technologies  Remitly Global

Very poor diversification

The 3 months correlation between Sangoma and Remitly is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Sangoma Technologies Corp and Remitly Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Remitly Global and Sangoma Technologies 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 Sangoma Technologies Corp are associated (or correlated) with Remitly Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Remitly Global has no effect on the direction of Sangoma Technologies i.e., Sangoma Technologies and Remitly Global go up and down completely randomly.

Pair Corralation between Sangoma Technologies and Remitly Global

Given the investment horizon of 90 days Sangoma Technologies Corp is expected to generate 1.41 times more return on investment than Remitly Global. However, Sangoma Technologies is 1.41 times more volatile than Remitly Global. It trades about 0.1 of its potential returns per unit of risk. Remitly Global is currently generating about 0.04 per unit of risk. If you would invest  320.00  in Sangoma Technologies Corp on September 24, 2024 and sell it today you would earn a total of  383.00  from holding Sangoma Technologies Corp or generate 119.69% return on investment over 90 days.

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

Sangoma Technologies Corp  vs.  Remitly Global

Sangoma Technologies Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sangoma Technologies Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Sangoma Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Remitly Global

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Remitly Global are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting essential indicators, Remitly Global showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sangoma Technologies and Remitly Global

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

The idea behind Sangoma Technologies Corp and Remitly Global 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.