Correlation Between Plastic Omnium and SOFI TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both Plastic Omnium 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 Plastic Omnium and SOFI TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plastic Omnium and SOFI TECHNOLOGIES, you can compare the effects of market volatilities on Plastic Omnium 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 Plastic Omnium with a short position of SOFI TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plastic Omnium and SOFI TECHNOLOGIES.
Diversification Opportunities for Plastic Omnium and SOFI TECHNOLOGIES
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Plastic and SOFI is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Plastic Omnium and SOFI TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOFI TECHNOLOGIES and Plastic Omnium 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 Plastic Omnium 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 Plastic Omnium i.e., Plastic Omnium and SOFI TECHNOLOGIES go up and down completely randomly.
Pair Corralation between Plastic Omnium and SOFI TECHNOLOGIES
Assuming the 90 days trading horizon Plastic Omnium is expected to generate 0.54 times more return on investment than SOFI TECHNOLOGIES. However, Plastic Omnium is 1.84 times less risky than SOFI TECHNOLOGIES. It trades about 0.06 of its potential returns per unit of risk. SOFI TECHNOLOGIES is currently generating about -0.17 per unit of risk. If you would invest 1,011 in Plastic Omnium on October 14, 2024 and sell it today you would earn a total of 16.00 from holding Plastic Omnium or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plastic Omnium vs. SOFI TECHNOLOGIES
Performance |
| Timeline |
| Plastic Omnium |
| SOFI TECHNOLOGIES |
Plastic Omnium and SOFI TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plastic Omnium and SOFI TECHNOLOGIES
The main advantage of trading using opposite Plastic Omnium and SOFI TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plastic Omnium 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's long position.| Plastic Omnium vs. Playa Hotels Resorts | Plastic Omnium vs. USWE SPORTS AB | Plastic Omnium vs. United Utilities Group | Plastic Omnium vs. PLAYTIKA HOLDING DL 01 |
| SOFI TECHNOLOGIES vs. MEDCAW INVESTMENTS LS 01 | SOFI TECHNOLOGIES vs. Plastic Omnium | SOFI TECHNOLOGIES vs. MidCap Financial Investment | SOFI TECHNOLOGIES vs. Martin Marietta Materials |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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