Correlation Between SoFi Technologies and Air Water
Can any of the company-specific risk be diversified away by investing in both SoFi Technologies and Air Water 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 Air Water into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SoFi Technologies and Air Water, you can compare the effects of market volatilities on SoFi Technologies and Air Water 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 Air Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoFi Technologies and Air Water.
Diversification Opportunities for SoFi Technologies and Air Water
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SoFi and Air is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding SoFi Technologies and Air Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Water 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 Air Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Water has no effect on the direction of SoFi Technologies i.e., SoFi Technologies and Air Water go up and down completely randomly.
Pair Corralation between SoFi Technologies and Air Water
Given the investment horizon of 90 days SoFi Technologies is expected to generate 2.35 times more return on investment than Air Water. However, SoFi Technologies is 2.35 times more volatile than Air Water. It trades about 0.09 of its potential returns per unit of risk. Air Water is currently generating about 0.0 per unit of risk. If you would invest 430.00 in SoFi Technologies on August 28, 2024 and sell it today you would earn a total of 1,140 from holding SoFi Technologies or generate 265.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 72.93% |
| Values | Daily Returns |
SoFi Technologies vs. Air Water
Performance |
| Timeline |
| SoFi Technologies |
| Air Water |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SoFi Technologies and Air Water Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoFi Technologies and Air Water
The main advantage of trading using opposite SoFi Technologies and Air Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoFi Technologies position performs unexpectedly, Air Water 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 Air Water will offset losses from the drop in Air Water's long position.| SoFi Technologies vs. Upstart Holdings | SoFi Technologies vs. Affirm Holdings | SoFi Technologies vs. Lucid Group | SoFi Technologies vs. Palantir Technologies |
| Air Water vs. Albemarle Corp | Air Water vs. Linde plc Ordinary | Air Water vs. Air Products and | Air Water vs. Dupont De Nemours |
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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