Correlation Between Sangoma Technologies and Eastern Platinum
Can any of the company-specific risk be diversified away by investing in both Sangoma Technologies and Eastern Platinum 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 Eastern Platinum 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 Eastern Platinum Limited, you can compare the effects of market volatilities on Sangoma Technologies and Eastern Platinum 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 Eastern Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangoma Technologies and Eastern Platinum.
Diversification Opportunities for Sangoma Technologies and Eastern Platinum
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sangoma and Eastern is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sangoma Technologies Corp and Eastern Platinum Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Platinum 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 Eastern Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Platinum has no effect on the direction of Sangoma Technologies i.e., Sangoma Technologies and Eastern Platinum go up and down completely randomly.
Pair Corralation between Sangoma Technologies and Eastern Platinum
Assuming the 90 days trading horizon Sangoma Technologies Corp is expected to under-perform the Eastern Platinum. But the stock apears to be less risky and, when comparing its historical volatility, Sangoma Technologies Corp is 2.45 times less risky than Eastern Platinum. The stock trades about -0.43 of its potential returns per unit of risk. The Eastern Platinum Limited is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Eastern Platinum Limited on December 8, 2024 and sell it today you would earn a total of 3.00 from holding Eastern Platinum Limited or generate 17.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sangoma Technologies Corp vs. Eastern Platinum Limited
Performance |
| Timeline |
| Sangoma Technologies Corp |
| Eastern Platinum |
Sangoma Technologies and Eastern Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangoma Technologies and Eastern Platinum
The main advantage of trading using opposite Sangoma Technologies and Eastern Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangoma Technologies position performs unexpectedly, Eastern Platinum 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 Eastern Platinum will offset losses from the drop in Eastern Platinum's long position.| Sangoma Technologies vs. Sylogist | ||
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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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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