Correlation Between SOFI TECHNOLOGIES and CN MODERN
Can any of the company-specific risk be diversified away by investing in both SOFI TECHNOLOGIES and CN MODERN 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 SOFI TECHNOLOGIES and CN MODERN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOFI TECHNOLOGIES and CN MODERN DAIRY, you can compare the effects of market volatilities on SOFI TECHNOLOGIES and CN MODERN 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 SOFI TECHNOLOGIES with a short position of CN MODERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFI TECHNOLOGIES and CN MODERN.
Diversification Opportunities for SOFI TECHNOLOGIES and CN MODERN
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SOFI and 07M is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding SOFI TECHNOLOGIES and CN MODERN DAIRY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN MODERN DAIRY and SOFI 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 SOFI TECHNOLOGIES are associated (or correlated) with CN MODERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN MODERN DAIRY has no effect on the direction of SOFI TECHNOLOGIES i.e., SOFI TECHNOLOGIES and CN MODERN go up and down completely randomly.
Pair Corralation between SOFI TECHNOLOGIES and CN MODERN
Assuming the 90 days horizon SOFI TECHNOLOGIES is expected to generate 0.88 times more return on investment than CN MODERN. However, SOFI TECHNOLOGIES is 1.13 times less risky than CN MODERN. It trades about 0.01 of its potential returns per unit of risk. CN MODERN DAIRY is currently generating about -0.14 per unit of risk. If you would invest 1,478 in SOFI TECHNOLOGIES on October 19, 2024 and sell it today you would lose (3.00) from holding SOFI TECHNOLOGIES or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
SOFI TECHNOLOGIES vs. CN MODERN DAIRY
Performance |
| Timeline |
| SOFI TECHNOLOGIES |
| CN MODERN DAIRY |
SOFI TECHNOLOGIES and CN MODERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOFI TECHNOLOGIES and CN MODERN
The main advantage of trading using opposite SOFI TECHNOLOGIES and CN MODERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFI TECHNOLOGIES position performs unexpectedly, CN MODERN 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 CN MODERN will offset losses from the drop in CN MODERN's long position.| SOFI TECHNOLOGIES vs. United States Steel | SOFI TECHNOLOGIES vs. Geely Automobile Holdings | SOFI TECHNOLOGIES vs. KOBE STEEL LTD | SOFI TECHNOLOGIES vs. GEELY AUTOMOBILE |
| CN MODERN vs. Addtech AB | CN MODERN vs. SOFI TECHNOLOGIES | CN MODERN vs. NetSol Technologies | CN MODERN vs. THORNEY TECHS LTD |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |