Correlation Between SOFI TECHNOLOGIES and HYATT HOTELS-A
Can any of the company-specific risk be diversified away by investing in both SOFI TECHNOLOGIES and HYATT HOTELS-A 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 HYATT HOTELS-A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOFI TECHNOLOGIES and HYATT HOTELS A, you can compare the effects of market volatilities on SOFI TECHNOLOGIES and HYATT HOTELS-A 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 HYATT HOTELS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFI TECHNOLOGIES and HYATT HOTELS-A.
Diversification Opportunities for SOFI TECHNOLOGIES and HYATT HOTELS-A
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SOFI and HYATT is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding SOFI TECHNOLOGIES and HYATT HOTELS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYATT HOTELS A 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 HYATT HOTELS-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYATT HOTELS A has no effect on the direction of SOFI TECHNOLOGIES i.e., SOFI TECHNOLOGIES and HYATT HOTELS-A go up and down completely randomly.
Pair Corralation between SOFI TECHNOLOGIES and HYATT HOTELS-A
Assuming the 90 days horizon SOFI TECHNOLOGIES is expected to generate 1.86 times more return on investment than HYATT HOTELS-A. However, SOFI TECHNOLOGIES is 1.86 times more volatile than HYATT HOTELS A. It trades about 0.47 of its potential returns per unit of risk. HYATT HOTELS A is currently generating about 0.1 per unit of risk. If you would invest 699.00 in SOFI TECHNOLOGIES on August 27, 2024 and sell it today you would earn a total of 804.00 from holding SOFI TECHNOLOGIES or generate 115.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOFI TECHNOLOGIES vs. HYATT HOTELS A
Performance |
| Timeline |
| SOFI TECHNOLOGIES |
| HYATT HOTELS A |
SOFI TECHNOLOGIES and HYATT HOTELS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOFI TECHNOLOGIES and HYATT HOTELS-A
The main advantage of trading using opposite SOFI TECHNOLOGIES and HYATT HOTELS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFI TECHNOLOGIES position performs unexpectedly, HYATT HOTELS-A 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 HYATT HOTELS-A will offset losses from the drop in HYATT HOTELS-A's long position.| SOFI TECHNOLOGIES vs. Apple Inc | SOFI TECHNOLOGIES vs. Apple Inc | SOFI TECHNOLOGIES vs. Apple Inc | SOFI TECHNOLOGIES vs. Apple Inc |
| HYATT HOTELS-A vs. Cogent Communications Holdings | HYATT HOTELS-A vs. SK TELECOM TDADR | HYATT HOTELS-A vs. AM EAGLE OUTFITTERS | HYATT HOTELS-A vs. Major Drilling Group |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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