Correlation Between Wialan Technologies and Sonim Technologies

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

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

Diversification Opportunities for Wialan Technologies and Sonim Technologies

0.4

Correlation Coefficient

Wialan Technologies  Sonim Technologies

Very weak diversification

The 3 months correlation between Wialan and Sonim is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Wialan Technologies and Sonim Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonim Technologies and Wialan 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 Wialan Technologies 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 Wialan Technologies i.e., Wialan Technologies and Sonim Technologies go up and down completely randomly.

Pair Corralation between Wialan Technologies and Sonim Technologies

Given the investment horizon of 90 days Wialan Technologies is expected to generate 1.9 times less return on investment than Sonim Technologies. In addition to that, Wialan Technologies is 2.27 times more volatile than Sonim Technologies. It trades about 0.03 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	Weak
Accuracy	98.44%
Values	Daily Returns

Wialan Technologies  vs.  Sonim Technologies

Wialan Technologies

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wialan Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Wialan Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

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 Wialan Technologies and Sonim Technologies

The main advantage of trading using opposite Wialan Technologies and Sonim Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wialan Technologies 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 Wialan Technologies 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.