Correlation Between SOFI TECHNOLOGIES and Gestamp Automocin
Can any of the company-specific risk be diversified away by investing in both SOFI TECHNOLOGIES and Gestamp Automocin 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 Gestamp Automocin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOFI TECHNOLOGIES and Gestamp Automocin SA, you can compare the effects of market volatilities on SOFI TECHNOLOGIES and Gestamp Automocin 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 Gestamp Automocin. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFI TECHNOLOGIES and Gestamp Automocin.
Diversification Opportunities for SOFI TECHNOLOGIES and Gestamp Automocin
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SOFI and Gestamp is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding SOFI TECHNOLOGIES and Gestamp Automocin SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gestamp Automocin 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 Gestamp Automocin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gestamp Automocin has no effect on the direction of SOFI TECHNOLOGIES i.e., SOFI TECHNOLOGIES and Gestamp Automocin go up and down completely randomly.
Pair Corralation between SOFI TECHNOLOGIES and Gestamp Automocin
Assuming the 90 days horizon SOFI TECHNOLOGIES is expected to generate 0.74 times more return on investment than Gestamp Automocin. However, SOFI TECHNOLOGIES is 1.35 times less risky than Gestamp Automocin. It trades about 0.26 of its potential returns per unit of risk. Gestamp Automocin SA is currently generating about 0.01 per unit of risk. If you would invest 1,305 in SOFI TECHNOLOGIES on September 13, 2024 and sell it today you would earn a total of 180.00 from holding SOFI TECHNOLOGIES or generate 13.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SOFI TECHNOLOGIES vs. Gestamp Automocin SA
Performance |
| Timeline |
| SOFI TECHNOLOGIES |
| Gestamp Automocin |
SOFI TECHNOLOGIES and Gestamp Automocin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOFI TECHNOLOGIES and Gestamp Automocin
The main advantage of trading using opposite SOFI TECHNOLOGIES and Gestamp Automocin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFI TECHNOLOGIES position performs unexpectedly, Gestamp Automocin 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 Gestamp Automocin will offset losses from the drop in Gestamp Automocin's long position.| SOFI TECHNOLOGIES vs. Sportsmans Warehouse Holdings | SOFI TECHNOLOGIES vs. Live Nation Entertainment | SOFI TECHNOLOGIES vs. CNVISION MEDIA | SOFI TECHNOLOGIES vs. EEDUCATION ALBERT AB |
| Gestamp Automocin vs. Axcelis Technologies | Gestamp Automocin vs. SOFI TECHNOLOGIES | Gestamp Automocin vs. Japan Asia Investment | Gestamp Automocin vs. CDL INVESTMENT |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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