Correlation Between SoFi Technologies and Northann Corp
Can any of the company-specific risk be diversified away by investing in both SoFi Technologies and Northann Corp 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 Northann Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SoFi Technologies and Northann Corp, you can compare the effects of market volatilities on SoFi Technologies and Northann Corp 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 Northann Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoFi Technologies and Northann Corp.
Diversification Opportunities for SoFi Technologies and Northann Corp
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SoFi and Northann is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding SoFi Technologies and Northann Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northann Corp 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 Northann Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northann Corp has no effect on the direction of SoFi Technologies i.e., SoFi Technologies and Northann Corp go up and down completely randomly.
Pair Corralation between SoFi Technologies and Northann Corp
Given the investment horizon of 90 days SoFi Technologies is expected to generate 1.28 times less return on investment than Northann Corp. But when comparing it to its historical volatility, SoFi Technologies is 5.09 times less risky than Northann Corp. It trades about 0.6 of its potential returns per unit of risk. Northann Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Northann Corp on September 1, 2024 and sell it today you would earn a total of 6.00 from holding Northann Corp or generate 31.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SoFi Technologies vs. Northann Corp
Performance |
| Timeline |
| SoFi Technologies |
| Northann Corp |
SoFi Technologies and Northann Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoFi Technologies and Northann Corp
The main advantage of trading using opposite SoFi Technologies and Northann Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoFi Technologies position performs unexpectedly, Northann Corp 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 Northann Corp will offset losses from the drop in Northann Corp's long position.| SoFi Technologies vs. 360 Finance | SoFi Technologies vs. Atlanticus Holdings | SoFi Technologies vs. Qudian Inc | SoFi Technologies vs. Enova International |
| Northann Corp vs. La Z Boy Incorporated | Northann Corp vs. Natuzzi SpA | Northann Corp vs. Mohawk Industries | Northann Corp vs. MasterBrand |
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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