Correlation Between SOFI TECHNOLOGIES and China Pacific
Can any of the company-specific risk be diversified away by investing in both SOFI TECHNOLOGIES and China Pacific 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 China Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOFI TECHNOLOGIES and China Pacific Insurance, you can compare the effects of market volatilities on SOFI TECHNOLOGIES and China Pacific 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 China Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFI TECHNOLOGIES and China Pacific.
Diversification Opportunities for SOFI TECHNOLOGIES and China Pacific
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SOFI and China is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding SOFI TECHNOLOGIES and China Pacific Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Pacific Insurance 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 China Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Pacific Insurance has no effect on the direction of SOFI TECHNOLOGIES i.e., SOFI TECHNOLOGIES and China Pacific go up and down completely randomly.
Pair Corralation between SOFI TECHNOLOGIES and China Pacific
Assuming the 90 days horizon SOFI TECHNOLOGIES is expected to generate 1.54 times more return on investment than China Pacific. However, SOFI TECHNOLOGIES is 1.54 times more volatile than China Pacific Insurance. It trades about 0.15 of its potential returns per unit of risk. China Pacific Insurance is currently generating about -0.14 per unit of risk. If you would invest 1,451 in SOFI TECHNOLOGIES on October 20, 2024 and sell it today you would earn a total of 139.00 from holding SOFI TECHNOLOGIES or generate 9.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOFI TECHNOLOGIES vs. China Pacific Insurance
Performance |
| Timeline |
| SOFI TECHNOLOGIES |
| China Pacific Insurance |
SOFI TECHNOLOGIES and China Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOFI TECHNOLOGIES and China Pacific
The main advantage of trading using opposite SOFI TECHNOLOGIES and China Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFI TECHNOLOGIES position performs unexpectedly, China Pacific 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 China Pacific will offset losses from the drop in China Pacific's long position.| SOFI TECHNOLOGIES vs. EBRO FOODS | SOFI TECHNOLOGIES vs. AUSNUTRIA DAIRY | SOFI TECHNOLOGIES vs. Nomad Foods | SOFI TECHNOLOGIES vs. SENECA FOODS A |
| China Pacific vs. Ping An Insurance | China Pacific vs. AIA Group Limited | China Pacific vs. China Life Insurance | China Pacific vs. MetLife |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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