Correlation Between Repsol and SOFI TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both Repsol 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 Repsol and SOFI TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Repsol and SOFI TECHNOLOGIES, you can compare the effects of market volatilities on Repsol 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 Repsol with a short position of SOFI TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repsol and SOFI TECHNOLOGIES.
Diversification Opportunities for Repsol and SOFI TECHNOLOGIES
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Repsol and SOFI is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Repsol and SOFI TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOFI TECHNOLOGIES and Repsol 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 Repsol 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 Repsol i.e., Repsol and SOFI TECHNOLOGIES go up and down completely randomly.
Pair Corralation between Repsol and SOFI TECHNOLOGIES
Assuming the 90 days horizon Repsol is expected to under-perform the SOFI TECHNOLOGIES. But the stock apears to be less risky and, when comparing its historical volatility, Repsol is 2.45 times less risky than SOFI TECHNOLOGIES. The stock trades about -0.11 of its potential returns per unit of risk. The SOFI TECHNOLOGIES is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 595.00 in SOFI TECHNOLOGIES on September 13, 2024 and sell it today you would earn a total of 890.00 from holding SOFI TECHNOLOGIES or generate 149.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Repsol vs. SOFI TECHNOLOGIES
Performance |
| Timeline |
| Repsol |
| SOFI TECHNOLOGIES |
Repsol and SOFI TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Repsol and SOFI TECHNOLOGIES
The main advantage of trading using opposite Repsol and SOFI TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repsol 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.| Repsol vs. SOFI TECHNOLOGIES | Repsol vs. ORMAT TECHNOLOGIES | Repsol vs. Jupiter Fund Management | Repsol vs. Uber Technologies |
| SOFI TECHNOLOGIES vs. Sportsmans Warehouse Holdings | SOFI TECHNOLOGIES vs. Live Nation Entertainment | SOFI TECHNOLOGIES vs. CNVISION MEDIA | SOFI TECHNOLOGIES vs. EEDUCATION ALBERT AB |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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