Correlation Between AXA SA and SOFI TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both AXA SA and SOFI TECHNOLOGIES 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 AXA SA and SOFI TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXA SA and SOFI TECHNOLOGIES, you can compare the effects of market volatilities on AXA SA and SOFI TECHNOLOGIES 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 AXA SA with a short position of SOFI TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA SA and SOFI TECHNOLOGIES.
Diversification Opportunities for AXA SA and SOFI TECHNOLOGIES
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AXA and SOFI is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and SOFI TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOFI TECHNOLOGIES and AXA SA 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 AXA SA are associated (or correlated) with SOFI TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOFI TECHNOLOGIES has no effect on the direction of AXA SA i.e., AXA SA and SOFI TECHNOLOGIES go up and down completely randomly.
Pair Corralation between AXA SA and SOFI TECHNOLOGIES
Assuming the 90 days trading horizon AXA SA is expected to under-perform the SOFI TECHNOLOGIES. But the stock apears to be less risky and, when comparing its historical volatility, AXA SA is 2.21 times less risky than SOFI TECHNOLOGIES. The stock trades about 0.0 of its potential returns per unit of risk. The SOFI TECHNOLOGIES is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 953.00 in SOFI TECHNOLOGIES on October 20, 2024 and sell it today you would earn a total of 522.00 from holding SOFI TECHNOLOGIES or generate 54.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.36% |
Values | Daily Returns |
AXA SA vs. SOFI TECHNOLOGIES
Performance |
Timeline |
AXA SA |
SOFI TECHNOLOGIES |
AXA SA and SOFI TECHNOLOGIES Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AXA SA and SOFI TECHNOLOGIES
The main advantage of trading using opposite AXA SA and SOFI TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXA SA position performs unexpectedly, SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES will offset losses from the drop in SOFI TECHNOLOGIES's long position.AXA SA vs. Apollo Investment Corp | ||
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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