Correlation Between Northann Corp and SoFi Technologies
Can any of the company-specific risk be diversified away by investing in both Northann Corp 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 Northann Corp and SoFi Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northann Corp and SoFi Technologies, you can compare the effects of market volatilities on Northann Corp 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 Northann Corp with a short position of SoFi Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northann Corp and SoFi Technologies.
Diversification Opportunities for Northann Corp and SoFi Technologies
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Northann and SoFi is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Northann Corp and SoFi Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoFi Technologies and Northann Corp 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 Northann Corp 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 Northann Corp i.e., Northann Corp and SoFi Technologies go up and down completely randomly.
Pair Corralation between Northann Corp and SoFi Technologies
Considering the 90-day investment horizon Northann Corp is expected to generate 5.09 times more return on investment than SoFi Technologies. However, Northann Corp is 5.09 times more volatile than SoFi Technologies. It trades about 0.15 of its potential returns per unit of risk. SoFi Technologies is currently generating about 0.6 per unit of risk. If you would invest 19.00 in Northann Corp on September 1, 2024 and sell it today you would earn a total of 6.00 from holding Northann Corp or generate 31.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northann Corp vs. SoFi Technologies
Performance |
| Timeline |
| Northann Corp |
| SoFi Technologies |
Northann Corp and SoFi Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northann Corp and SoFi Technologies
The main advantage of trading using opposite Northann Corp and SoFi Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northann Corp 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.| Northann Corp vs. La Z Boy Incorporated | Northann Corp vs. Natuzzi SpA | Northann Corp vs. Mohawk Industries | Northann Corp vs. MasterBrand |
| SoFi Technologies vs. 360 Finance | SoFi Technologies vs. Atlanticus Holdings | SoFi Technologies vs. Qudian Inc | SoFi Technologies vs. Enova International |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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