Correlation Between SoFi Technologies and Bank Central
Can any of the company-specific risk be diversified away by investing in both SoFi Technologies and Bank Central 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 Bank Central into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SoFi Technologies and Bank Central Asia, you can compare the effects of market volatilities on SoFi Technologies and Bank Central 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 Bank Central. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoFi Technologies and Bank Central.
Diversification Opportunities for SoFi Technologies and Bank Central
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SoFi and Bank is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding SoFi Technologies and Bank Central Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Central Asia 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 Bank Central. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Central Asia has no effect on the direction of SoFi Technologies i.e., SoFi Technologies and Bank Central go up and down completely randomly.
Pair Corralation between SoFi Technologies and Bank Central
Given the investment horizon of 90 days SoFi Technologies is expected to generate 2.82 times more return on investment than Bank Central. However, SoFi Technologies is 2.82 times more volatile than Bank Central Asia. It trades about 0.47 of its potential returns per unit of risk. Bank Central Asia is currently generating about -0.34 per unit of risk. If you would invest 1,042 in SoFi Technologies on August 24, 2024 and sell it today you would earn a total of 459.00 from holding SoFi Technologies or generate 44.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SoFi Technologies vs. Bank Central Asia
Performance |
| Timeline |
| SoFi Technologies |
| Bank Central Asia |
SoFi Technologies and Bank Central Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoFi Technologies and Bank Central
The main advantage of trading using opposite SoFi Technologies and Bank Central positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoFi Technologies position performs unexpectedly, Bank Central 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 Bank Central will offset losses from the drop in Bank Central'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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |