Correlation Between SoFi Next and Rose Hill
Can any of the company-specific risk be diversified away by investing in both SoFi Next and Rose Hill 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 Next and Rose Hill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SoFi Next 500 and Rose Hill Acquisition, you can compare the effects of market volatilities on SoFi Next and Rose Hill 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 Next with a short position of Rose Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoFi Next and Rose Hill.
Diversification Opportunities for SoFi Next and Rose Hill
Pay attention - limited upside
The 3 months correlation between SoFi and Rose is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SoFi Next 500 and Rose Hill Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rose Hill Acquisition and SoFi Next 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 Next 500 are associated (or correlated) with Rose Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rose Hill Acquisition has no effect on the direction of SoFi Next i.e., SoFi Next and Rose Hill go up and down completely randomly.
Pair Corralation between SoFi Next and Rose Hill
If you would invest 1,155 in SoFi Next 500 on November 19, 2024 and sell it today you would earn a total of 361.70 from holding SoFi Next 500 or generate 31.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
SoFi Next 500 vs. Rose Hill Acquisition
Performance |
| Timeline |
| SoFi Next 500 |
| Rose Hill Acquisition |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
SoFi Next and Rose Hill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoFi Next and Rose Hill
The main advantage of trading using opposite SoFi Next and Rose Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoFi Next position performs unexpectedly, Rose Hill 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 Rose Hill will offset losses from the drop in Rose Hill's long position.The idea behind SoFi Next 500 and Rose Hill Acquisition pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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