Correlation Between SoFi Technologies and Shell PLC
Can any of the company-specific risk be diversified away by investing in both SoFi Technologies and Shell PLC 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 Shell PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SoFi Technologies and Shell PLC, you can compare the effects of market volatilities on SoFi Technologies and Shell PLC 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 Shell PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoFi Technologies and Shell PLC.
Diversification Opportunities for SoFi Technologies and Shell PLC
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SoFi and Shell is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding SoFi Technologies and Shell PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shell PLC 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 Shell PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shell PLC has no effect on the direction of SoFi Technologies i.e., SoFi Technologies and Shell PLC go up and down completely randomly.
Pair Corralation between SoFi Technologies and Shell PLC
Given the investment horizon of 90 days SoFi Technologies is expected to under-perform the Shell PLC. In addition to that, SoFi Technologies is 1.92 times more volatile than Shell PLC. It trades about -0.06 of its total potential returns per unit of risk. Shell PLC is currently generating about 0.15 per unit of volatility. If you would invest 3,017 in Shell PLC on December 27, 2024 and sell it today you would earn a total of 622.00 from holding Shell PLC or generate 20.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SoFi Technologies vs. Shell PLC
Performance |
Timeline |
SoFi Technologies |
Shell PLC |
SoFi Technologies and Shell PLC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SoFi Technologies and Shell PLC
The main advantage of trading using opposite SoFi Technologies and Shell PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoFi Technologies position performs unexpectedly, Shell PLC 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 Shell PLC will offset losses from the drop in Shell PLC's long position.SoFi Technologies vs. Upstart Holdings | SoFi Technologies vs. Affirm Holdings | SoFi Technologies vs. Lucid Group | SoFi Technologies vs. Palantir Technologies Class |
Shell PLC vs. Eni SpA | Shell PLC vs. MOL PLC ADR | Shell PLC vs. PetroChina Co Ltd | Shell PLC vs. Equinor ASA |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Global Correlations Find global opportunities by holding instruments from different markets |