Correlation Between Data Communications and WonderFi Technologies

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

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

Diversification Opportunities for Data Communications and WonderFi Technologies

0.1

Correlation Coefficient

Data Communications  WonderFi Technologies

Average diversification

The 3 months correlation between Data and WonderFi is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Data Communications Management and WonderFi Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WonderFi Technologies and Data Communications 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 Data Communications Management are associated (or correlated) with WonderFi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WonderFi Technologies has no effect on the direction of Data Communications i.e., Data Communications and WonderFi Technologies go up and down completely randomly.

Pair Corralation between Data Communications and WonderFi Technologies

Assuming the 90 days trading horizon Data Communications Management is expected to under-perform the WonderFi Technologies. In addition to that, Data Communications is 2.06 times more volatile than WonderFi Technologies. It trades about -0.09 of its total potential returns per unit of risk. WonderFi Technologies is currently generating about 0.04 per unit of volatility. If you would invest  34.00  in WonderFi Technologies on May 18, 2025 and sell it today you would earn a total of  1.00  from holding WonderFi Technologies or generate 2.94% return on investment over 90 days.

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

Data Communications Management  vs.  WonderFi Technologies

Data Communications

Risk-Adjusted Performance

Weakest

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

WonderFi Technologies

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in WonderFi Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, WonderFi Technologies is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Data Communications and WonderFi Technologies

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

The idea behind Data Communications Management and WonderFi 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.