Correlation Between SoFi Technologies and Indofood CBP
Can any of the company-specific risk be diversified away by investing in both SoFi Technologies and Indofood CBP 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 Indofood CBP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SoFi Technologies and Indofood CBP Sukses, you can compare the effects of market volatilities on SoFi Technologies and Indofood CBP 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 Indofood CBP. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoFi Technologies and Indofood CBP.
Diversification Opportunities for SoFi Technologies and Indofood CBP
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SoFi and Indofood is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding SoFi Technologies and Indofood CBP Sukses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indofood CBP Sukses 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 Indofood CBP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indofood CBP Sukses has no effect on the direction of SoFi Technologies i.e., SoFi Technologies and Indofood CBP go up and down completely randomly.
Pair Corralation between SoFi Technologies and Indofood CBP
Given the investment horizon of 90 days SoFi Technologies is expected to generate 1.12 times more return on investment than Indofood CBP. However, SoFi Technologies is 1.12 times more volatile than Indofood CBP Sukses. It trades about 0.33 of its potential returns per unit of risk. Indofood CBP Sukses is currently generating about -0.21 per unit of risk. If you would invest 1,350 in SoFi Technologies on September 14, 2024 and sell it today you would earn a total of 240.00 from holding SoFi Technologies or generate 17.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
SoFi Technologies vs. Indofood CBP Sukses
Performance |
| Timeline |
| SoFi Technologies |
| Indofood CBP Sukses |
SoFi Technologies and Indofood CBP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoFi Technologies and Indofood CBP
The main advantage of trading using opposite SoFi Technologies and Indofood CBP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoFi Technologies position performs unexpectedly, Indofood CBP 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 Indofood CBP will offset losses from the drop in Indofood CBP's long position.| SoFi Technologies vs. Upstart Holdings | SoFi Technologies vs. Affirm Holdings | SoFi Technologies vs. Lucid Group | SoFi Technologies vs. Palantir Technologies Class |
| Indofood CBP vs. Indofood Sukses Makmur | Indofood CBP vs. First Pacific | Indofood CBP vs. Grupo Herdez SAB | Indofood CBP vs. Fraser and Neave |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |