Correlation Between SoFi Technologies and SIA Engineering
Can any of the company-specific risk be diversified away by investing in both SoFi Technologies and SIA Engineering 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 SIA Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SoFi Technologies and SIA Engineering, you can compare the effects of market volatilities on SoFi Technologies and SIA Engineering 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 SIA Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoFi Technologies and SIA Engineering.
Diversification Opportunities for SoFi Technologies and SIA Engineering
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SoFi and SIA is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding SoFi Technologies and SIA Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIA Engineering 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 SIA Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIA Engineering has no effect on the direction of SoFi Technologies i.e., SoFi Technologies and SIA Engineering go up and down completely randomly.
Pair Corralation between SoFi Technologies and SIA Engineering
If you would invest 1,563 in SoFi Technologies on October 23, 2024 and sell it today you would earn a total of 87.00 from holding SoFi Technologies or generate 5.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.0% |
| Values | Daily Returns |
SoFi Technologies vs. SIA Engineering
Performance |
| Timeline |
| SoFi Technologies |
| SIA Engineering |
SoFi Technologies and SIA Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoFi Technologies and SIA Engineering
The main advantage of trading using opposite SoFi Technologies and SIA Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoFi Technologies position performs unexpectedly, SIA Engineering 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 SIA Engineering will offset losses from the drop in SIA Engineering's long position.| SoFi Technologies vs. Upstart Holdings | SoFi Technologies vs. Affirm Holdings | SoFi Technologies vs. Lucid Group | SoFi Technologies vs. Palantir Technologies Class |
| SIA Engineering vs. Jerash Holdings | SIA Engineering vs. Boot Barn Holdings | SIA Engineering vs. Tyson Foods | SIA Engineering vs. G III Apparel Group |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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