Correlation Between Insurance Australia and SOFI TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both Insurance Australia 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 Insurance Australia and SOFI TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insurance Australia Group and SOFI TECHNOLOGIES, you can compare the effects of market volatilities on Insurance Australia 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 Insurance Australia with a short position of SOFI TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insurance Australia and SOFI TECHNOLOGIES.
Diversification Opportunities for Insurance Australia and SOFI TECHNOLOGIES
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Insurance and SOFI is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Insurance Australia Group and SOFI TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOFI TECHNOLOGIES and Insurance Australia 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 Insurance Australia 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 Insurance Australia i.e., Insurance Australia and SOFI TECHNOLOGIES go up and down completely randomly.
Pair Corralation between Insurance Australia and SOFI TECHNOLOGIES
Assuming the 90 days horizon Insurance Australia is expected to generate 2.38 times less return on investment than SOFI TECHNOLOGIES. But when comparing it to its historical volatility, Insurance Australia Group is 2.6 times less risky than SOFI TECHNOLOGIES. It trades about 0.08 of its potential returns per unit of risk. SOFI TECHNOLOGIES is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 434.00 in SOFI TECHNOLOGIES on August 25, 2024 and sell it today you would earn a total of 1,004 from holding SOFI TECHNOLOGIES or generate 231.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insurance Australia Group vs. SOFI TECHNOLOGIES
Performance |
| Timeline |
| Insurance Australia |
| SOFI TECHNOLOGIES |
Insurance Australia and SOFI TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insurance Australia and SOFI TECHNOLOGIES
The main advantage of trading using opposite Insurance Australia and SOFI TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insurance Australia 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.| Insurance Australia vs. Superior Plus Corp | Insurance Australia vs. NMI Holdings | Insurance Australia vs. Origin Agritech | Insurance Australia vs. SIVERS SEMICONDUCTORS AB |
| SOFI TECHNOLOGIES vs. Suntory Beverage Food | SOFI TECHNOLOGIES vs. ScanSource | SOFI TECHNOLOGIES vs. Insurance Australia Group | SOFI TECHNOLOGIES vs. SCANSOURCE |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |