Correlation Between SOFI TECHNOLOGIES and Brockhaus Capital

Can any of the company-specific risk be diversified away by investing in both SOFI TECHNOLOGIES and Brockhaus Capital 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 Brockhaus Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SOFI TECHNOLOGIES and Brockhaus Capital Management, you can compare the effects of market volatilities on SOFI TECHNOLOGIES and Brockhaus Capital 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 Brockhaus Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFI TECHNOLOGIES and Brockhaus Capital.

Diversification Opportunities for SOFI TECHNOLOGIES and Brockhaus Capital

0.72

Correlation Coefficient

SOFI TECHNOLOGIES  Brockhaus Capital

Poor diversification

The 3 months correlation between SOFI and Brockhaus is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding SOFI TECHNOLOGIES and Brockhaus Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brockhaus Capital 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 Brockhaus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brockhaus Capital has no effect on the direction of SOFI TECHNOLOGIES i.e., SOFI TECHNOLOGIES and Brockhaus Capital go up and down completely randomly.

Pair Corralation between SOFI TECHNOLOGIES and Brockhaus Capital

Assuming the 90 days horizon SOFI TECHNOLOGIES is expected to generate 1.18 times more return on investment than Brockhaus Capital. However, SOFI TECHNOLOGIES is 1.18 times more volatile than Brockhaus Capital Management. It trades about -0.05 of its potential returns per unit of risk. Brockhaus Capital Management is currently generating about -0.11 per unit of risk. If you would invest  1,517  in SOFI TECHNOLOGIES on December 27, 2024 and sell it today you would lose (255.00) from holding SOFI TECHNOLOGIES or give up 16.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

SOFI TECHNOLOGIES  vs.  Brockhaus Capital Management

SOFI TECHNOLOGIES

Risk-Adjusted Performance

Very Weak

Over the last 90 days SOFI TECHNOLOGIES has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Brockhaus Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brockhaus Capital Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with SOFI TECHNOLOGIES and Brockhaus Capital

The main advantage of trading using opposite SOFI TECHNOLOGIES and Brockhaus Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFI TECHNOLOGIES position performs unexpectedly, Brockhaus Capital 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 Brockhaus Capital will offset losses from the drop in Brockhaus Capital's long position.

The idea behind SOFI TECHNOLOGIES and Brockhaus Capital Management pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..