Correlation Between SOFI TECHNOLOGIES and Asahi Group
Can any of the company-specific risk be diversified away by investing in both SOFI TECHNOLOGIES and Asahi Group 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 Asahi Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOFI TECHNOLOGIES and Asahi Group Holdings, you can compare the effects of market volatilities on SOFI TECHNOLOGIES and Asahi Group 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 Asahi Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFI TECHNOLOGIES and Asahi Group.
Diversification Opportunities for SOFI TECHNOLOGIES and Asahi Group
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SOFI and Asahi is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding SOFI TECHNOLOGIES and Asahi Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asahi Group Holdings 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 Asahi Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asahi Group Holdings has no effect on the direction of SOFI TECHNOLOGIES i.e., SOFI TECHNOLOGIES and Asahi Group go up and down completely randomly.
Pair Corralation between SOFI TECHNOLOGIES and Asahi Group
Assuming the 90 days horizon SOFI TECHNOLOGIES is expected to generate 1.73 times more return on investment than Asahi Group. However, SOFI TECHNOLOGIES is 1.73 times more volatile than Asahi Group Holdings. It trades about 0.21 of its potential returns per unit of risk. Asahi Group Holdings is currently generating about -0.04 per unit of risk. If you would invest 630.00 in SOFI TECHNOLOGIES on August 29, 2024 and sell it today you would earn a total of 873.00 from holding SOFI TECHNOLOGIES or generate 138.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOFI TECHNOLOGIES vs. Asahi Group Holdings
Performance |
| Timeline |
| SOFI TECHNOLOGIES |
| Asahi Group Holdings |
SOFI TECHNOLOGIES and Asahi Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOFI TECHNOLOGIES and Asahi Group
The main advantage of trading using opposite SOFI TECHNOLOGIES and Asahi Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFI TECHNOLOGIES position performs unexpectedly, Asahi Group 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 Asahi Group will offset losses from the drop in Asahi Group's long position.| SOFI TECHNOLOGIES vs. Apple Inc | SOFI TECHNOLOGIES vs. Apple Inc | SOFI TECHNOLOGIES vs. Apple Inc | SOFI TECHNOLOGIES vs. Apple Inc |
| Asahi Group vs. Microchip Technology Incorporated | Asahi Group vs. SOFI TECHNOLOGIES | Asahi Group vs. PKSHA TECHNOLOGY INC | Asahi Group vs. Sunny Optical Technology |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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