Correlation Between Associated Capital and SoFi Technologies
Can any of the company-specific risk be diversified away by investing in both Associated Capital and SoFi Technologies 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 Associated Capital and SoFi Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and SoFi Technologies, you can compare the effects of market volatilities on Associated Capital and SoFi Technologies 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 Associated Capital with a short position of SoFi Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and SoFi Technologies.
Diversification Opportunities for Associated Capital and SoFi Technologies
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Associated and SoFi is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and SoFi Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoFi Technologies and Associated Capital 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 Associated Capital Group are associated (or correlated) with SoFi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SoFi Technologies has no effect on the direction of Associated Capital i.e., Associated Capital and SoFi Technologies go up and down completely randomly.
Pair Corralation between Associated Capital and SoFi Technologies
Allowing for the 90-day total investment horizon Associated Capital is expected to generate 69.04 times less return on investment than SoFi Technologies. But when comparing it to its historical volatility, Associated Capital Group is 4.42 times less risky than SoFi Technologies. It trades about 0.03 of its potential returns per unit of risk. SoFi Technologies is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 1,119 in SoFi Technologies on August 28, 2024 and sell it today you would earn a total of 451.00 from holding SoFi Technologies or generate 40.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. SoFi Technologies
Performance |
| Timeline |
| Associated Capital |
| SoFi Technologies |
Associated Capital and SoFi Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and SoFi Technologies
The main advantage of trading using opposite Associated Capital and SoFi Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, SoFi Technologies 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 SoFi Technologies will offset losses from the drop in SoFi Technologies' long position.| Associated Capital vs. PowerUp Acquisition Corp | Associated Capital vs. Aurora Innovation | Associated Capital vs. HUMANA INC | Associated Capital vs. Aquagold International |
| SoFi Technologies vs. Upstart Holdings | SoFi Technologies vs. Affirm Holdings | SoFi Technologies vs. Lucid Group | SoFi Technologies vs. Palantir Technologies |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |