Correlation Between SOFI TECHNOLOGIES and CREDIT AGRICOLE
Can any of the company-specific risk be diversified away by investing in both SOFI TECHNOLOGIES and CREDIT AGRICOLE 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 CREDIT AGRICOLE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOFI TECHNOLOGIES and CREDIT AGRICOLE, you can compare the effects of market volatilities on SOFI TECHNOLOGIES and CREDIT AGRICOLE 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 CREDIT AGRICOLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFI TECHNOLOGIES and CREDIT AGRICOLE.
Diversification Opportunities for SOFI TECHNOLOGIES and CREDIT AGRICOLE
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SOFI and CREDIT is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding SOFI TECHNOLOGIES and CREDIT AGRICOLE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CREDIT AGRICOLE 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 CREDIT AGRICOLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CREDIT AGRICOLE has no effect on the direction of SOFI TECHNOLOGIES i.e., SOFI TECHNOLOGIES and CREDIT AGRICOLE go up and down completely randomly.
Pair Corralation between SOFI TECHNOLOGIES and CREDIT AGRICOLE
Assuming the 90 days horizon SOFI TECHNOLOGIES is expected to under-perform the CREDIT AGRICOLE. In addition to that, SOFI TECHNOLOGIES is 2.5 times more volatile than CREDIT AGRICOLE. It trades about -0.02 of its total potential returns per unit of risk. CREDIT AGRICOLE is currently generating about 0.03 per unit of volatility. If you would invest 1,294 in CREDIT AGRICOLE on September 24, 2024 and sell it today you would earn a total of 6.00 from holding CREDIT AGRICOLE or generate 0.46% 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. CREDIT AGRICOLE
Performance |
Timeline |
SOFI TECHNOLOGIES |
CREDIT AGRICOLE |
SOFI TECHNOLOGIES and CREDIT AGRICOLE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SOFI TECHNOLOGIES and CREDIT AGRICOLE
The main advantage of trading using opposite SOFI TECHNOLOGIES and CREDIT AGRICOLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFI TECHNOLOGIES position performs unexpectedly, CREDIT AGRICOLE 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 CREDIT AGRICOLE will offset losses from the drop in CREDIT AGRICOLE's long position.SOFI TECHNOLOGIES vs. Wizz Air Holdings | SOFI TECHNOLOGIES vs. Fair Isaac Corp | SOFI TECHNOLOGIES vs. Xinhua Winshare Publishing | SOFI TECHNOLOGIES vs. CAREER EDUCATION |
CREDIT AGRICOLE vs. Flutter Entertainment PLC | CREDIT AGRICOLE vs. Ubisoft Entertainment SA | CREDIT AGRICOLE vs. PLAYSTUDIOS A DL 0001 | CREDIT AGRICOLE vs. SOFI TECHNOLOGIES |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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