Correlation Between SOFI TECHNOLOGIES and PICKN PAY
Can any of the company-specific risk be diversified away by investing in both SOFI TECHNOLOGIES and PICKN PAY 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 PICKN PAY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOFI TECHNOLOGIES and PICKN PAY STORES, you can compare the effects of market volatilities on SOFI TECHNOLOGIES and PICKN PAY 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 PICKN PAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFI TECHNOLOGIES and PICKN PAY.
Diversification Opportunities for SOFI TECHNOLOGIES and PICKN PAY
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SOFI and PICKN is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding SOFI TECHNOLOGIES and PICKN PAY STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICKN PAY STORES 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 PICKN PAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICKN PAY STORES has no effect on the direction of SOFI TECHNOLOGIES i.e., SOFI TECHNOLOGIES and PICKN PAY go up and down completely randomly.
Pair Corralation between SOFI TECHNOLOGIES and PICKN PAY
Assuming the 90 days horizon SOFI TECHNOLOGIES is expected to generate 1.82 times more return on investment than PICKN PAY. However, SOFI TECHNOLOGIES is 1.82 times more volatile than PICKN PAY STORES. It trades about 0.02 of its potential returns per unit of risk. PICKN PAY STORES is currently generating about -0.08 per unit of risk. If you would invest 1,374 in SOFI TECHNOLOGIES on December 2, 2024 and sell it today you would earn a total of 6.00 from holding SOFI TECHNOLOGIES or generate 0.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SOFI TECHNOLOGIES vs. PICKN PAY STORES
Performance |
Timeline |
SOFI TECHNOLOGIES |
PICKN PAY STORES |
SOFI TECHNOLOGIES and PICKN PAY Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SOFI TECHNOLOGIES and PICKN PAY
The main advantage of trading using opposite SOFI TECHNOLOGIES and PICKN PAY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFI TECHNOLOGIES position performs unexpectedly, PICKN PAY 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 PICKN PAY will offset losses from the drop in PICKN PAY's long position.SOFI TECHNOLOGIES vs. INTERCONT HOTELS | SOFI TECHNOLOGIES vs. Planet Fitness | SOFI TECHNOLOGIES vs. Bumrungrad Hospital PCL | SOFI TECHNOLOGIES vs. UNIDOC HEALTH P |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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