Correlation Between FEMALE HEALTH and SOFI TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both FEMALE HEALTH 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 FEMALE HEALTH and SOFI TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FEMALE HEALTH and SOFI TECHNOLOGIES, you can compare the effects of market volatilities on FEMALE HEALTH 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 FEMALE HEALTH with a short position of SOFI TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of FEMALE HEALTH and SOFI TECHNOLOGIES.
Diversification Opportunities for FEMALE HEALTH and SOFI TECHNOLOGIES
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FEMALE and SOFI is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding FEMALE HEALTH and SOFI TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOFI TECHNOLOGIES and FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH i.e., FEMALE HEALTH and SOFI TECHNOLOGIES go up and down completely randomly.
Pair Corralation between FEMALE HEALTH and SOFI TECHNOLOGIES
Assuming the 90 days trading horizon FEMALE HEALTH is expected to under-perform the SOFI TECHNOLOGIES. In addition to that, FEMALE HEALTH is 1.41 times more volatile than SOFI TECHNOLOGIES. It trades about -0.04 of its total potential returns per unit of risk. SOFI TECHNOLOGIES is currently generating about 0.08 per unit of volatility. If you would invest 403.00 in SOFI TECHNOLOGIES on September 2, 2024 and sell it today you would earn a total of 1,161 from holding SOFI TECHNOLOGIES or generate 288.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FEMALE HEALTH vs. SOFI TECHNOLOGIES
Performance |
| Timeline |
| FEMALE HEALTH |
| SOFI TECHNOLOGIES |
FEMALE HEALTH and SOFI TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FEMALE HEALTH and SOFI TECHNOLOGIES
The main advantage of trading using opposite FEMALE HEALTH and SOFI TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FEMALE HEALTH 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.| FEMALE HEALTH vs. SIVERS SEMICONDUCTORS AB | FEMALE HEALTH vs. Darden Restaurants | FEMALE HEALTH vs. Reliance Steel Aluminum | FEMALE HEALTH vs. Q2M Managementberatung AG |
| SOFI TECHNOLOGIES vs. Apple Inc | SOFI TECHNOLOGIES vs. Apple Inc | SOFI TECHNOLOGIES vs. Apple Inc | SOFI TECHNOLOGIES vs. Apple Inc |
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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