Correlation Between IShares MSCI and SoFi Social
Can any of the company-specific risk be diversified away by investing in both IShares MSCI 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 IShares MSCI and SoFi Social into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI USA and SoFi Social 50, you can compare the effects of market volatilities on IShares MSCI 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 IShares MSCI with a short position of SoFi Social. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and SoFi Social.
Diversification Opportunities for IShares MSCI and SoFi Social
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and SoFi is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI USA 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 IShares MSCI 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 iShares MSCI USA 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 IShares MSCI i.e., IShares MSCI and SoFi Social go up and down completely randomly.
Pair Corralation between IShares MSCI and SoFi Social
Given the investment horizon of 90 days IShares MSCI is expected to generate 3.7 times less return on investment than SoFi Social. But when comparing it to its historical volatility, iShares MSCI USA is 1.85 times less risky than SoFi Social. It trades about 0.13 of its potential returns per unit of risk. SoFi Social 50 is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 3,889 in SoFi Social 50 on August 29, 2024 and sell it today you would earn a total of 343.00 from holding SoFi Social 50 or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI USA vs. SoFi Social 50
Performance |
| Timeline |
| iShares MSCI USA |
| SoFi Social 50 |
IShares MSCI and SoFi Social Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and SoFi Social
The main advantage of trading using opposite IShares MSCI and SoFi Social positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI 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.| IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. Invesco SP 500 |
| SoFi Social vs. iShares MSCI USA | SoFi Social vs. iShares MSCI USA | SoFi Social vs. iShares MSCI USA | SoFi Social vs. iShares Expanded Tech Software |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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