Correlation Between SoFi Technologies and Airports
Can any of the company-specific risk be diversified away by investing in both SoFi Technologies and Airports 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 Technologies and Airports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SoFi Technologies and Airports of Thailand, you can compare the effects of market volatilities on SoFi Technologies and Airports 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 Technologies with a short position of Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoFi Technologies and Airports.
Diversification Opportunities for SoFi Technologies and Airports
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SoFi and Airports is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding SoFi Technologies and Airports of Thailand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airports of Thailand and SoFi Technologies 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 Technologies are associated (or correlated) with Airports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airports of Thailand has no effect on the direction of SoFi Technologies i.e., SoFi Technologies and Airports go up and down completely randomly.
Pair Corralation between SoFi Technologies and Airports
Given the investment horizon of 90 days SoFi Technologies is expected to generate 3.32 times more return on investment than Airports. However, SoFi Technologies is 3.32 times more volatile than Airports of Thailand. It trades about 0.42 of its potential returns per unit of risk. Airports of Thailand is currently generating about 0.21 per unit of risk. If you would invest 1,119 in SoFi Technologies on August 28, 2024 and sell it today you would earn a total of 430.00 from holding SoFi Technologies or generate 38.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SoFi Technologies vs. Airports of Thailand
Performance |
| Timeline |
| SoFi Technologies |
| Airports of Thailand |
SoFi Technologies and Airports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoFi Technologies and Airports
The main advantage of trading using opposite SoFi Technologies and Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoFi Technologies position performs unexpectedly, Airports 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 Airports will offset losses from the drop in Airports' long position.| SoFi Technologies vs. Upstart Holdings | SoFi Technologies vs. Affirm Holdings | SoFi Technologies vs. Lucid Group | SoFi Technologies vs. Palantir Technologies |
| Airports vs. Aerofoam Metals | Airports vs. Porvair plc | Airports vs. Tyson Foods | Airports vs. Lion One Metals |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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