Correlation Between SOFI TECHNOLOGIES and International Flavors
Can any of the company-specific risk be diversified away by investing in both SOFI TECHNOLOGIES and International Flavors 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 International Flavors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOFI TECHNOLOGIES and International Flavors Fragrances, you can compare the effects of market volatilities on SOFI TECHNOLOGIES and International Flavors 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 International Flavors. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFI TECHNOLOGIES and International Flavors.
Diversification Opportunities for SOFI TECHNOLOGIES and International Flavors
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SOFI and International is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding SOFI TECHNOLOGIES and International Flavors Fragranc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Flavors 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 International Flavors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Flavors has no effect on the direction of SOFI TECHNOLOGIES i.e., SOFI TECHNOLOGIES and International Flavors go up and down completely randomly.
Pair Corralation between SOFI TECHNOLOGIES and International Flavors
Assuming the 90 days horizon SOFI TECHNOLOGIES is expected to under-perform the International Flavors. In addition to that, SOFI TECHNOLOGIES is 4.53 times more volatile than International Flavors Fragrances. It trades about -0.1 of its total potential returns per unit of risk. International Flavors Fragrances is currently generating about -0.43 per unit of volatility. If you would invest 8,385 in International Flavors Fragrances on October 9, 2024 and sell it today you would lose (409.00) from holding International Flavors Fragrances or give up 4.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOFI TECHNOLOGIES vs. International Flavors Fragranc
Performance |
| Timeline |
| SOFI TECHNOLOGIES |
| International Flavors |
SOFI TECHNOLOGIES and International Flavors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOFI TECHNOLOGIES and International Flavors
The main advantage of trading using opposite SOFI TECHNOLOGIES and International Flavors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFI TECHNOLOGIES position performs unexpectedly, International Flavors 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 International Flavors will offset losses from the drop in International Flavors' long position.| SOFI TECHNOLOGIES vs. Monster Beverage Corp | SOFI TECHNOLOGIES vs. Nufarm Limited | SOFI TECHNOLOGIES vs. Federal Agricultural Mortgage | SOFI TECHNOLOGIES vs. DAIRY FARM INTL |
| International Flavors vs. BANK OF CHINA | International Flavors vs. Commonwealth Bank of | International Flavors vs. Perseus Mining Limited | International Flavors vs. ADRIATIC METALS LS 013355 |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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