Correlation Between SoFi Social and Global X
Can any of the company-specific risk be diversified away by investing in both SoFi Social and Global X 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 SoFi Social and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SoFi Social 50 and Global X Blockchain, you can compare the effects of market volatilities on SoFi Social and Global X 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 SoFi Social with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoFi Social and Global X.
Diversification Opportunities for SoFi Social and Global X
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SoFi and Global is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding SoFi Social 50 and Global X Blockchain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Blockchain and SoFi Social 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 SoFi Social 50 are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Blockchain has no effect on the direction of SoFi Social i.e., SoFi Social and Global X go up and down completely randomly.
Pair Corralation between SoFi Social and Global X
Given the investment horizon of 90 days SoFi Social is expected to generate 2.85 times less return on investment than Global X. But when comparing it to its historical volatility, SoFi Social 50 is 3.18 times less risky than Global X. It trades about 0.1 of its potential returns per unit of risk. Global X Blockchain is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,483 in Global X Blockchain on August 29, 2024 and sell it today you would earn a total of 5,473 from holding Global X Blockchain or generate 369.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SoFi Social 50 vs. Global X Blockchain
Performance |
| Timeline |
| SoFi Social 50 |
| Global X Blockchain |
SoFi Social and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoFi Social and Global X
The main advantage of trading using opposite SoFi Social and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoFi Social position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| 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 |
| Global X vs. Vanguard Industrials Index | Global X vs. Vanguard Consumer Discretionary | Global X vs. Vanguard Materials Index | Global X vs. Vanguard Health Care |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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