Correlation Between SoFi Technologies and Vinci SA
Can any of the company-specific risk be diversified away by investing in both SoFi Technologies and Vinci SA 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 Vinci SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SoFi Technologies and Vinci SA ADR, you can compare the effects of market volatilities on SoFi Technologies and Vinci SA 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 Vinci SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoFi Technologies and Vinci SA.
Diversification Opportunities for SoFi Technologies and Vinci SA
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SoFi and Vinci is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding SoFi Technologies and Vinci SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinci SA ADR 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 Vinci SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinci SA ADR has no effect on the direction of SoFi Technologies i.e., SoFi Technologies and Vinci SA go up and down completely randomly.
Pair Corralation between SoFi Technologies and Vinci SA
Given the investment horizon of 90 days SoFi Technologies is expected to generate 2.0 times more return on investment than Vinci SA. However, SoFi Technologies is 2.0 times more volatile than Vinci SA ADR. It trades about 0.23 of its potential returns per unit of risk. Vinci SA ADR is currently generating about -0.09 per unit of risk. If you would invest 690.00 in SoFi Technologies on August 29, 2024 and sell it today you would earn a total of 922.00 from holding SoFi Technologies or generate 133.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SoFi Technologies vs. Vinci SA ADR
Performance |
| Timeline |
| SoFi Technologies |
| Vinci SA ADR |
SoFi Technologies and Vinci SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoFi Technologies and Vinci SA
The main advantage of trading using opposite SoFi Technologies and Vinci SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoFi Technologies position performs unexpectedly, Vinci SA 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 Vinci SA will offset losses from the drop in Vinci SA's long position.| SoFi Technologies vs. Visa Class A | SoFi Technologies vs. Mastercard | SoFi Technologies vs. Discover Financial Services |
| Vinci SA vs. Arcadis NV | Vinci SA vs. KBR Inc | Vinci SA vs. Orion Group Holdings | Vinci SA vs. Jacobs Solutions |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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