Correlation Between SoFi Technologies and McCormick Company
Can any of the company-specific risk be diversified away by investing in both SoFi Technologies and McCormick Company 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 McCormick Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SoFi Technologies and McCormick Company Incorporated, you can compare the effects of market volatilities on SoFi Technologies and McCormick Company 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 McCormick Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoFi Technologies and McCormick Company.
Diversification Opportunities for SoFi Technologies and McCormick Company
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SoFi and McCormick is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding SoFi Technologies and McCormick Company Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McCormick Company 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 McCormick Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McCormick Company has no effect on the direction of SoFi Technologies i.e., SoFi Technologies and McCormick Company go up and down completely randomly.
Pair Corralation between SoFi Technologies and McCormick Company
Given the investment horizon of 90 days SoFi Technologies is expected to generate 3.09 times more return on investment than McCormick Company. However, SoFi Technologies is 3.09 times more volatile than McCormick Company Incorporated. It trades about 0.44 of its potential returns per unit of risk. McCormick Company Incorporated is currently generating about -0.08 per unit of risk. If you would invest 1,119 in SoFi Technologies on August 27, 2024 and sell it today you would earn a total of 441.00 from holding SoFi Technologies or generate 39.41% 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. McCormick Company Incorporated
Performance |
| Timeline |
| SoFi Technologies |
| McCormick Company |
SoFi Technologies and McCormick Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoFi Technologies and McCormick Company
The main advantage of trading using opposite SoFi Technologies and McCormick Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoFi Technologies position performs unexpectedly, McCormick Company 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 McCormick Company will offset losses from the drop in McCormick Company's long position.| SoFi Technologies vs. Upstart Holdings | SoFi Technologies vs. Affirm Holdings | SoFi Technologies vs. Lucid Group | SoFi Technologies vs. Palantir Technologies |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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