Correlation Between Sangoma Technologies and OneSpan

Can any of the company-specific risk be diversified away by investing in both Sangoma Technologies and OneSpan 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 OneSpan 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 OneSpan, you can compare the effects of market volatilities on Sangoma Technologies and OneSpan 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 OneSpan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangoma Technologies and OneSpan.

Diversification Opportunities for Sangoma Technologies and OneSpan

0.44

Correlation Coefficient

Sangoma Technologies  OneSpan

Very weak diversification

The 3 months correlation between Sangoma and OneSpan is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sangoma Technologies Corp and OneSpan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneSpan 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 OneSpan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneSpan has no effect on the direction of Sangoma Technologies i.e., Sangoma Technologies and OneSpan go up and down completely randomly.

Pair Corralation between Sangoma Technologies and OneSpan

Given the investment horizon of 90 days Sangoma Technologies is expected to generate 1.09 times less return on investment than OneSpan. But when comparing it to its historical volatility, Sangoma Technologies Corp is 1.37 times less risky than OneSpan. It trades about 0.15 of its potential returns per unit of risk. OneSpan is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  946.00  in OneSpan on February 23, 2024 and sell it today you would earn a total of  314.00  from holding OneSpan or generate 33.19% return on investment over 90 days.

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

Sangoma Technologies Corp  vs.  OneSpan

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 unfluctuating basic indicators, Sangoma Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

OneSpan

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OneSpan are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, OneSpan displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sangoma Technologies and OneSpan

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

The idea behind Sangoma Technologies Corp and OneSpan 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.