Correlation Between SoFi Technologies and Coca Cola
Can any of the company-specific risk be diversified away by investing in both SoFi Technologies and Coca Cola 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 Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SoFi Technologies and Coca Cola Consolidated, you can compare the effects of market volatilities on SoFi Technologies and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoFi Technologies and Coca Cola.
Diversification Opportunities for SoFi Technologies and Coca Cola
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SoFi and Coca is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding SoFi Technologies and Coca Cola Consolidated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola Consolidated 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola Consolidated has no effect on the direction of SoFi Technologies i.e., SoFi Technologies and Coca Cola go up and down completely randomly.
Pair Corralation between SoFi Technologies and Coca Cola
Given the investment horizon of 90 days SoFi Technologies is expected to generate 2.0 times more return on investment than Coca Cola. However, SoFi Technologies is 2.0 times more volatile than Coca Cola Consolidated. It trades about 0.37 of its potential returns per unit of risk. Coca Cola Consolidated is currently generating about -0.01 per unit of risk. If you would invest 749.00 in SoFi Technologies on August 28, 2024 and sell it today you would earn a total of 821.00 from holding SoFi Technologies or generate 109.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SoFi Technologies vs. Coca Cola Consolidated
Performance |
| Timeline |
| SoFi Technologies |
| Coca Cola Consolidated |
SoFi Technologies and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoFi Technologies and Coca Cola
The main advantage of trading using opposite SoFi Technologies and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoFi Technologies position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.| SoFi Technologies vs. Upstart Holdings | SoFi Technologies vs. Affirm Holdings | SoFi Technologies vs. Lucid Group | SoFi Technologies vs. Palantir Technologies |
| Coca Cola vs. The Coca Cola | Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Keurig Dr Pepper |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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