Correlation Between SoFi Technologies and Heineken Holding
Can any of the company-specific risk be diversified away by investing in both SoFi Technologies and Heineken Holding 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 Heineken Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SoFi Technologies and Heineken Holding NV, you can compare the effects of market volatilities on SoFi Technologies and Heineken Holding 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 Heineken Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoFi Technologies and Heineken Holding.
Diversification Opportunities for SoFi Technologies and Heineken Holding
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SoFi and Heineken is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding SoFi Technologies and Heineken Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken Holding 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 Heineken Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heineken Holding has no effect on the direction of SoFi Technologies i.e., SoFi Technologies and Heineken Holding go up and down completely randomly.
Pair Corralation between SoFi Technologies and Heineken Holding
Given the investment horizon of 90 days SoFi Technologies is expected to under-perform the Heineken Holding. In addition to that, SoFi Technologies is 2.06 times more volatile than Heineken Holding NV. It trades about -0.08 of its total potential returns per unit of risk. Heineken Holding NV is currently generating about -0.14 per unit of volatility. If you would invest 6,209 in Heineken Holding NV on October 7, 2024 and sell it today you would lose (332.00) from holding Heineken Holding NV or give up 5.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SoFi Technologies vs. Heineken Holding NV
Performance |
| Timeline |
| SoFi Technologies |
| Heineken Holding |
SoFi Technologies and Heineken Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoFi Technologies and Heineken Holding
The main advantage of trading using opposite SoFi Technologies and Heineken Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoFi Technologies position performs unexpectedly, Heineken Holding 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 Heineken Holding will offset losses from the drop in Heineken Holding's long position.| SoFi Technologies vs. Upstart Holdings | SoFi Technologies vs. Affirm Holdings | SoFi Technologies vs. Lucid Group | SoFi Technologies vs. Palantir Technologies Class |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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