Correlation Between Invesco NASDAQ and SoFi Social
Can any of the company-specific risk be diversified away by investing in both Invesco NASDAQ 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 Invesco NASDAQ and SoFi Social into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco NASDAQ 100 and SoFi Social 50, you can compare the effects of market volatilities on Invesco NASDAQ 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 Invesco NASDAQ with a short position of SoFi Social. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco NASDAQ and SoFi Social.
Diversification Opportunities for Invesco NASDAQ and SoFi Social
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Invesco and SoFi is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Invesco NASDAQ 100 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 Invesco NASDAQ 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 Invesco NASDAQ 100 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 Invesco NASDAQ i.e., Invesco NASDAQ and SoFi Social go up and down completely randomly.
Pair Corralation between Invesco NASDAQ and SoFi Social
Given the investment horizon of 90 days Invesco NASDAQ is expected to generate 2.39 times less return on investment than SoFi Social. But when comparing it to its historical volatility, Invesco NASDAQ 100 is 1.33 times less risky than SoFi Social. It trades about 0.25 of its potential returns per unit of risk. SoFi Social 50 is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 3,760 in SoFi Social 50 on September 1, 2024 and sell it today you would earn a total of 501.00 from holding SoFi Social 50 or generate 13.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco NASDAQ 100 vs. SoFi Social 50
Performance |
| Timeline |
| Invesco NASDAQ 100 |
| SoFi Social 50 |
Invesco NASDAQ and SoFi Social Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco NASDAQ and SoFi Social
The main advantage of trading using opposite Invesco NASDAQ and SoFi Social positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco NASDAQ 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.| Invesco NASDAQ vs. Vanguard Growth Index | Invesco NASDAQ vs. iShares Russell 1000 | Invesco NASDAQ vs. iShares SP 500 | Invesco NASDAQ vs. iShares Core SP |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |