Correlation Between SOFI TECHNOLOGIES and Performance Food
Can any of the company-specific risk be diversified away by investing in both SOFI TECHNOLOGIES and Performance Food 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 Performance Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOFI TECHNOLOGIES and Performance Food Group, you can compare the effects of market volatilities on SOFI TECHNOLOGIES and Performance Food 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 Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFI TECHNOLOGIES and Performance Food.
Diversification Opportunities for SOFI TECHNOLOGIES and Performance Food
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SOFI and Performance is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding SOFI TECHNOLOGIES and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food 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 Performance Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Food has no effect on the direction of SOFI TECHNOLOGIES i.e., SOFI TECHNOLOGIES and Performance Food go up and down completely randomly.
Pair Corralation between SOFI TECHNOLOGIES and Performance Food
Assuming the 90 days horizon SOFI TECHNOLOGIES is expected to generate 1.62 times more return on investment than Performance Food. However, SOFI TECHNOLOGIES is 1.62 times more volatile than Performance Food Group. It trades about 0.37 of its potential returns per unit of risk. Performance Food Group is currently generating about 0.1 per unit of risk. If you would invest 1,296 in SOFI TECHNOLOGIES on September 15, 2024 and sell it today you would earn a total of 256.00 from holding SOFI TECHNOLOGIES or generate 19.75% 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. Performance Food Group
Performance |
| Timeline |
| SOFI TECHNOLOGIES |
| Performance Food |
SOFI TECHNOLOGIES and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOFI TECHNOLOGIES and Performance Food
The main advantage of trading using opposite SOFI TECHNOLOGIES and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFI TECHNOLOGIES position performs unexpectedly, Performance Food 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 Performance Food will offset losses from the drop in Performance Food's long position.| SOFI TECHNOLOGIES vs. GungHo Online Entertainment | SOFI TECHNOLOGIES vs. Aluminum of | SOFI TECHNOLOGIES vs. OFFICE DEPOT | SOFI TECHNOLOGIES vs. YATRA ONLINE DL 0001 |
| Performance Food vs. Zoom Video Communications | Performance Food vs. SOFI TECHNOLOGIES | Performance Food vs. GLG LIFE TECH | Performance Food vs. Spirent Communications plc |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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