Correlation Between SOFI TECHNOLOGIES and Pembina Pipeline
Can any of the company-specific risk be diversified away by investing in both SOFI TECHNOLOGIES and Pembina Pipeline 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 Pembina Pipeline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOFI TECHNOLOGIES and Pembina Pipeline Corp, you can compare the effects of market volatilities on SOFI TECHNOLOGIES and Pembina Pipeline 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 Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFI TECHNOLOGIES and Pembina Pipeline.
Diversification Opportunities for SOFI TECHNOLOGIES and Pembina Pipeline
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SOFI and Pembina is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding SOFI TECHNOLOGIES and Pembina Pipeline Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pembina Pipeline Corp 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 Pembina Pipeline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pembina Pipeline Corp has no effect on the direction of SOFI TECHNOLOGIES i.e., SOFI TECHNOLOGIES and Pembina Pipeline go up and down completely randomly.
Pair Corralation between SOFI TECHNOLOGIES and Pembina Pipeline
Assuming the 90 days horizon SOFI TECHNOLOGIES is expected to generate 3.35 times more return on investment than Pembina Pipeline. However, SOFI TECHNOLOGIES is 3.35 times more volatile than Pembina Pipeline Corp. It trades about 0.08 of its potential returns per unit of risk. Pembina Pipeline Corp is currently generating about 0.06 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOFI TECHNOLOGIES vs. Pembina Pipeline Corp
Performance |
| Timeline |
| SOFI TECHNOLOGIES |
| Pembina Pipeline Corp |
SOFI TECHNOLOGIES and Pembina Pipeline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOFI TECHNOLOGIES and Pembina Pipeline
The main advantage of trading using opposite SOFI TECHNOLOGIES and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFI TECHNOLOGIES position performs unexpectedly, Pembina Pipeline 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 Pembina Pipeline will offset losses from the drop in Pembina Pipeline'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 |
| Pembina Pipeline vs. ONEOK Inc | Pembina Pipeline vs. Superior Plus Corp | Pembina Pipeline vs. NMI Holdings | Pembina Pipeline vs. Origin Agritech |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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