Correlation Between Global X and SoFi Social
Can any of the company-specific risk be diversified away by investing in both Global X and SoFi Social 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 Global X and SoFi Social into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Blockchain and SoFi Social 50, you can compare the effects of market volatilities on Global X and SoFi Social 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 Global X with a short position of SoFi Social. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and SoFi Social.
Diversification Opportunities for Global X and SoFi Social
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and SoFi is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Global X Blockchain and SoFi Social 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoFi Social 50 and Global X 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 Global X Blockchain are associated (or correlated) with SoFi Social. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SoFi Social 50 has no effect on the direction of Global X i.e., Global X and SoFi Social go up and down completely randomly.
Pair Corralation between Global X and SoFi Social
Given the investment horizon of 90 days Global X Blockchain is expected to generate 3.29 times more return on investment than SoFi Social. However, Global X is 3.29 times more volatile than SoFi Social 50. It trades about 0.07 of its potential returns per unit of risk. SoFi Social 50 is currently generating about 0.1 per unit of risk. If you would invest 2,072 in Global X Blockchain on October 25, 2024 and sell it today you would earn a total of 4,021 from holding Global X Blockchain or generate 194.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Blockchain vs. SoFi Social 50
Performance |
| Timeline |
| Global X Blockchain |
| SoFi Social 50 |
Global X and SoFi Social Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and SoFi Social
The main advantage of trading using opposite Global X and SoFi Social positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, SoFi Social 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 Social will offset losses from the drop in SoFi Social's long position.| Global X vs. VanEck Digital Transformation | Global X vs. Bitwise Crypto Industry | Global X vs. First Trust Indxx | Global X vs. First Trust SkyBridge |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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