Correlation Between SoFi Technologies and Mill City

Can any of the company-specific risk be diversified away by investing in both SoFi Technologies and Mill City 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 Mill City into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SoFi Technologies and Mill City Ventures, you can compare the effects of market volatilities on SoFi Technologies and Mill City 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 Mill City. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoFi Technologies and Mill City.

Diversification Opportunities for SoFi Technologies and Mill City

-0.64

Correlation Coefficient

SoFi Technologies  Mill City

Excellent diversification

The 3 months correlation between SoFi and Mill is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding SoFi Technologies and Mill City Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mill City Ventures 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 Mill City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mill City Ventures has no effect on the direction of SoFi Technologies i.e., SoFi Technologies and Mill City go up and down completely randomly.

Pair Corralation between SoFi Technologies and Mill City

Given the investment horizon of 90 days SoFi Technologies is expected to generate 26.04 times less return on investment than Mill City. But when comparing it to its historical volatility, SoFi Technologies is 24.46 times less risky than Mill City. It trades about 0.08 of its potential returns per unit of risk. Mill City Ventures is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  270.00  in Mill City Ventures on October 5, 2024 and sell it today you would lose (74.00) from holding Mill City Ventures or give up 27.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	92.91%
Values	Daily Returns

SoFi Technologies  vs.  Mill City Ventures

SoFi Technologies

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SoFi Technologies are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain technical and fundamental indicators, SoFi Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Mill City Ventures

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mill City Ventures are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Mill City is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SoFi Technologies and Mill City

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

The idea behind SoFi Technologies and Mill City Ventures 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.