Correlation Between SOFI TECHNOLOGIES and Astral Foods
Can any of the company-specific risk be diversified away by investing in both SOFI TECHNOLOGIES and Astral Foods 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 Astral Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOFI TECHNOLOGIES and Astral Foods Limited, you can compare the effects of market volatilities on SOFI TECHNOLOGIES and Astral Foods 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 Astral Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFI TECHNOLOGIES and Astral Foods.
Diversification Opportunities for SOFI TECHNOLOGIES and Astral Foods
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SOFI and Astral is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding SOFI TECHNOLOGIES and Astral Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astral Foods Limited 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 Astral Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astral Foods Limited has no effect on the direction of SOFI TECHNOLOGIES i.e., SOFI TECHNOLOGIES and Astral Foods go up and down completely randomly.
Pair Corralation between SOFI TECHNOLOGIES and Astral Foods
Assuming the 90 days horizon SOFI TECHNOLOGIES is expected to generate 2.09 times more return on investment than Astral Foods. However, SOFI TECHNOLOGIES is 2.09 times more volatile than Astral Foods Limited. It trades about 0.31 of its potential returns per unit of risk. Astral Foods Limited is currently generating about 0.14 per unit of risk. If you would invest 949.00 in SOFI TECHNOLOGIES on September 22, 2024 and sell it today you would earn a total of 532.00 from holding SOFI TECHNOLOGIES or generate 56.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOFI TECHNOLOGIES vs. Astral Foods Limited
Performance |
| Timeline |
| SOFI TECHNOLOGIES |
| Astral Foods Limited |
SOFI TECHNOLOGIES and Astral Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOFI TECHNOLOGIES and Astral Foods
The main advantage of trading using opposite SOFI TECHNOLOGIES and Astral Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFI TECHNOLOGIES position performs unexpectedly, Astral Foods 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 Astral Foods will offset losses from the drop in Astral Foods' long position.| SOFI TECHNOLOGIES vs. Apple Inc | SOFI TECHNOLOGIES vs. Apple Inc | SOFI TECHNOLOGIES vs. Apple Inc | SOFI TECHNOLOGIES vs. Apple Inc |
| Astral Foods vs. Goodyear Tire Rubber | Astral Foods vs. Fast Retailing Co | Astral Foods vs. FAST RETAIL ADR | Astral Foods vs. CARSALESCOM |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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