Correlation Between SoFi Technologies and PT Bank
Can any of the company-specific risk be diversified away by investing in both SoFi Technologies and PT Bank 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 PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SoFi Technologies and PT Bank Rakyat, you can compare the effects of market volatilities on SoFi Technologies and PT Bank 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 PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoFi Technologies and PT Bank.
Diversification Opportunities for SoFi Technologies and PT Bank
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SoFi and BKRKF is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding SoFi Technologies and PT Bank Rakyat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Rakyat 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 PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Rakyat has no effect on the direction of SoFi Technologies i.e., SoFi Technologies and PT Bank go up and down completely randomly.
Pair Corralation between SoFi Technologies and PT Bank
Given the investment horizon of 90 days SoFi Technologies is expected to generate 0.61 times more return on investment than PT Bank. However, SoFi Technologies is 1.63 times less risky than PT Bank. It trades about 0.1 of its potential returns per unit of risk. PT Bank Rakyat is currently generating about 0.02 per unit of risk. If you would invest 729.00 in SoFi Technologies on August 26, 2024 and sell it today you would earn a total of 831.00 from holding SoFi Technologies or generate 113.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 84.74% |
| Values | Daily Returns |
SoFi Technologies vs. PT Bank Rakyat
Performance |
| Timeline |
| SoFi Technologies |
| PT Bank Rakyat |
SoFi Technologies and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoFi Technologies and PT Bank
The main advantage of trading using opposite SoFi Technologies and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoFi Technologies position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.| SoFi Technologies vs. Upstart Holdings | SoFi Technologies vs. Affirm Holdings | SoFi Technologies vs. Lucid Group | SoFi Technologies vs. Palantir Technologies |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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