Correlation Between SOFI TECHNOLOGIES and ALERION CLEANPOWER
Can any of the company-specific risk be diversified away by investing in both SOFI TECHNOLOGIES and ALERION CLEANPOWER 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 ALERION CLEANPOWER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOFI TECHNOLOGIES and ALERION CLEANPOWER, you can compare the effects of market volatilities on SOFI TECHNOLOGIES and ALERION CLEANPOWER 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 ALERION CLEANPOWER. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFI TECHNOLOGIES and ALERION CLEANPOWER.
Diversification Opportunities for SOFI TECHNOLOGIES and ALERION CLEANPOWER
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SOFI and ALERION is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding SOFI TECHNOLOGIES and ALERION CLEANPOWER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALERION CLEANPOWER 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 ALERION CLEANPOWER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALERION CLEANPOWER has no effect on the direction of SOFI TECHNOLOGIES i.e., SOFI TECHNOLOGIES and ALERION CLEANPOWER go up and down completely randomly.
Pair Corralation between SOFI TECHNOLOGIES and ALERION CLEANPOWER
Assuming the 90 days horizon SOFI TECHNOLOGIES is expected to generate 3.03 times more return on investment than ALERION CLEANPOWER. However, SOFI TECHNOLOGIES is 3.03 times more volatile than ALERION CLEANPOWER. It trades about -0.02 of its potential returns per unit of risk. ALERION CLEANPOWER is currently generating about -0.08 per unit of risk. If you would invest 1,600 in SOFI TECHNOLOGIES on November 18, 2024 and sell it today you would lose (53.00) from holding SOFI TECHNOLOGIES or give up 3.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOFI TECHNOLOGIES vs. ALERION CLEANPOWER
Performance |
| Timeline |
| SOFI TECHNOLOGIES |
| ALERION CLEANPOWER |
SOFI TECHNOLOGIES and ALERION CLEANPOWER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOFI TECHNOLOGIES and ALERION CLEANPOWER
The main advantage of trading using opposite SOFI TECHNOLOGIES and ALERION CLEANPOWER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFI TECHNOLOGIES position performs unexpectedly, ALERION CLEANPOWER 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 ALERION CLEANPOWER will offset losses from the drop in ALERION CLEANPOWER's long position.| SOFI TECHNOLOGIES vs. GAMING FAC SA | SOFI TECHNOLOGIES vs. PREMIER FOODS | SOFI TECHNOLOGIES vs. SENECA FOODS A | SOFI TECHNOLOGIES vs. High Liner Foods |
| ALERION CLEANPOWER vs. Alibaba Health Information | ALERION CLEANPOWER vs. DATADOT TECHNOLOGY | ALERION CLEANPOWER vs. Information Services International Dentsu | ALERION CLEANPOWER vs. DATANG INTL POW |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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