Correlation Between Kaufman Broad and SOFI TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both Kaufman Broad and SOFI 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 Kaufman Broad and SOFI TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaufman Broad SA and SOFI TECHNOLOGIES, you can compare the effects of market volatilities on Kaufman Broad and SOFI 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 Kaufman Broad with a short position of SOFI TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaufman Broad and SOFI TECHNOLOGIES.
Diversification Opportunities for Kaufman Broad and SOFI TECHNOLOGIES
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kaufman and SOFI is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kaufman Broad SA and SOFI TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOFI TECHNOLOGIES and Kaufman Broad 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 Kaufman Broad SA are associated (or correlated) with SOFI TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOFI TECHNOLOGIES has no effect on the direction of Kaufman Broad i.e., Kaufman Broad and SOFI TECHNOLOGIES go up and down completely randomly.
Pair Corralation between Kaufman Broad and SOFI TECHNOLOGIES
Assuming the 90 days horizon Kaufman Broad SA is expected to generate 0.4 times more return on investment than SOFI TECHNOLOGIES. However, Kaufman Broad SA is 2.5 times less risky than SOFI TECHNOLOGIES. It trades about 0.25 of its potential returns per unit of risk. SOFI TECHNOLOGIES is currently generating about -0.25 per unit of risk. If you would invest 3,070 in Kaufman Broad SA on October 15, 2024 and sell it today you would earn a total of 175.00 from holding Kaufman Broad SA or generate 5.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaufman Broad SA vs. SOFI TECHNOLOGIES
Performance |
| Timeline |
| Kaufman Broad SA |
| SOFI TECHNOLOGIES |
Kaufman Broad and SOFI TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaufman Broad and SOFI TECHNOLOGIES
The main advantage of trading using opposite Kaufman Broad and SOFI TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaufman Broad position performs unexpectedly, SOFI 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 SOFI TECHNOLOGIES will offset losses from the drop in SOFI TECHNOLOGIES's long position.| Kaufman Broad vs. Forsys Metals Corp | Kaufman Broad vs. SERI INDUSTRIAL EO | Kaufman Broad vs. United Breweries Co | Kaufman Broad vs. National Beverage Corp |
| SOFI TECHNOLOGIES vs. MEDCAW INVESTMENTS LS 01 | SOFI TECHNOLOGIES vs. Plastic Omnium | SOFI TECHNOLOGIES vs. MidCap Financial Investment | SOFI TECHNOLOGIES vs. Martin Marietta Materials |
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 Stocks Directory module to find actively traded stocks across global markets.
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