Correlation Between SOFI TECHNOLOGIES and DELTA AIR
Can any of the company-specific risk be diversified away by investing in both SOFI TECHNOLOGIES and DELTA AIR 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 DELTA AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOFI TECHNOLOGIES and DELTA AIR LINES, you can compare the effects of market volatilities on SOFI TECHNOLOGIES and DELTA AIR 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 DELTA AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFI TECHNOLOGIES and DELTA AIR.
Diversification Opportunities for SOFI TECHNOLOGIES and DELTA AIR
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SOFI and DELTA is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding SOFI TECHNOLOGIES and DELTA AIR LINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DELTA AIR LINES 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 DELTA AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DELTA AIR LINES has no effect on the direction of SOFI TECHNOLOGIES i.e., SOFI TECHNOLOGIES and DELTA AIR go up and down completely randomly.
Pair Corralation between SOFI TECHNOLOGIES and DELTA AIR
Assuming the 90 days horizon SOFI TECHNOLOGIES is expected to generate 2.06 times more return on investment than DELTA AIR. However, SOFI TECHNOLOGIES is 2.06 times more volatile than DELTA AIR LINES. It trades about 0.08 of its potential returns per unit of risk. DELTA AIR LINES is currently generating about 0.07 per unit of risk. If you would invest 418.00 in SOFI TECHNOLOGIES on September 3, 2024 and sell it today you would earn a total of 1,146 from holding SOFI TECHNOLOGIES or generate 274.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOFI TECHNOLOGIES vs. DELTA AIR LINES
Performance |
| Timeline |
| SOFI TECHNOLOGIES |
| DELTA AIR LINES |
SOFI TECHNOLOGIES and DELTA AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOFI TECHNOLOGIES and DELTA AIR
The main advantage of trading using opposite SOFI TECHNOLOGIES and DELTA AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFI TECHNOLOGIES position performs unexpectedly, DELTA AIR 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 DELTA AIR will offset losses from the drop in DELTA AIR's long position.| SOFI TECHNOLOGIES vs. Scientific Games | SOFI TECHNOLOGIES vs. VIAPLAY GROUP AB | SOFI TECHNOLOGIES vs. Universal Display | SOFI TECHNOLOGIES vs. Playa Hotels Resorts |
| DELTA AIR vs. Cars Inc | DELTA AIR vs. GRUPO CARSO A1 | DELTA AIR vs. Geely Automobile Holdings | DELTA AIR vs. CPU SOFTWAREHOUSE |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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