Correlation Between SBA Communications and FONIX MOBILE

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

By analyzing existing cross correlation between SBA Communications Corp and FONIX MOBILE PLC, you can compare the effects of market volatilities on SBA Communications and FONIX MOBILE 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 SBA Communications with a short position of FONIX MOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBA Communications and FONIX MOBILE.

Diversification Opportunities for SBA Communications and FONIX MOBILE

0.3

Correlation Coefficient

SBA Communications  FONIX MOBILE

Weak diversification

The 3 months correlation between SBA and FONIX is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding SBA Communications Corp and FONIX MOBILE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FONIX MOBILE PLC and SBA 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 SBA Communications Corp are associated (or correlated) with FONIX MOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FONIX MOBILE PLC has no effect on the direction of SBA Communications i.e., SBA Communications and FONIX MOBILE go up and down completely randomly.

Pair Corralation between SBA Communications and FONIX MOBILE

Assuming the 90 days trading horizon SBA Communications is expected to generate 11.09 times less return on investment than FONIX MOBILE. But when comparing it to its historical volatility, SBA Communications Corp is 1.09 times less risky than FONIX MOBILE. It trades about 0.01 of its potential returns per unit of risk. FONIX MOBILE PLC is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  222.00  in FONIX MOBILE PLC on April 20, 2025 and sell it today you would earn a total of  32.00  from holding FONIX MOBILE PLC or generate 14.41% return on investment over 90 days.

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

SBA Communications Corp  vs.  FONIX MOBILE PLC

SBA Communications Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days SBA Communications Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SBA Communications is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

FONIX MOBILE PLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FONIX MOBILE PLC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, FONIX MOBILE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SBA Communications and FONIX MOBILE

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

The idea behind SBA Communications Corp and FONIX MOBILE PLC 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.