Correlation Between IQVIA Holdings and SOFI TECHNOLOGIES

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

By analyzing existing cross correlation between IQVIA Holdings and SOFI TECHNOLOGIES, you can compare the effects of market volatilities on IQVIA Holdings 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 IQVIA Holdings with a short position of SOFI TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQVIA Holdings and SOFI TECHNOLOGIES.

Diversification Opportunities for IQVIA Holdings and SOFI TECHNOLOGIES

0.73

Correlation Coefficient

IQVIA Holdings  SOFI TECHNOLOGIES

Poor diversification

The 3 months correlation between IQVIA and SOFI is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding IQVIA Holdings and SOFI TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOFI TECHNOLOGIES and IQVIA Holdings 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 IQVIA Holdings 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 IQVIA Holdings i.e., IQVIA Holdings and SOFI TECHNOLOGIES go up and down completely randomly.

Pair Corralation between IQVIA Holdings and SOFI TECHNOLOGIES

Assuming the 90 days horizon IQVIA Holdings is expected to generate 0.4 times more return on investment than SOFI TECHNOLOGIES. However, IQVIA Holdings is 2.53 times less risky than SOFI TECHNOLOGIES. It trades about -0.09 of its potential returns per unit of risk. SOFI TECHNOLOGIES is currently generating about -0.09 per unit of risk. If you would invest  18,495  in IQVIA Holdings on December 19, 2024 and sell it today you would lose (1,570) from holding IQVIA Holdings or give up 8.49% of portfolio value over 90 days.

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

IQVIA Holdings  vs.  SOFI TECHNOLOGIES

IQVIA Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days IQVIA Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

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.

Pair Trading with IQVIA Holdings and SOFI TECHNOLOGIES

The main advantage of trading using opposite IQVIA Holdings and SOFI TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQVIA Holdings 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.

The idea behind IQVIA Holdings and SOFI TECHNOLOGIES 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.