Correlation Between TGIF and SoFi Next

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

By analyzing existing cross correlation between TGIF and SoFi Next 500, you can compare the effects of market volatilities on TGIF and SoFi Next 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 TGIF with a short position of SoFi Next. Check out your portfolio center. Please also check ongoing floating volatility patterns of TGIF and SoFi Next.

Diversification Opportunities for TGIF and SoFi Next

0.0

Correlation Coefficient

TGIF  SoFi Next

Pay attention - limited upside

The 3 months correlation between TGIF and SoFi is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TGIF and SoFi Next 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoFi Next 500 and TGIF 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 TGIF are associated (or correlated) with SoFi Next. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SoFi Next 500 has no effect on the direction of TGIF i.e., TGIF and SoFi Next go up and down completely randomly.

Pair Corralation between TGIF and SoFi Next

If you would invest (100.00) in TGIF on December 11, 2024 and sell it today you would earn a total of  100.00  from holding TGIF or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

TGIF  vs.  SoFi Next 500

TGIF

Risk-Adjusted Performance

Very Weak

Over the last 90 days TGIF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, TGIF is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

SoFi Next 500

Risk-Adjusted Performance

Very Weak

Over the last 90 days SoFi Next 500 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Etf's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with TGIF and SoFi Next

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

The idea behind TGIF and SoFi Next 500 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 Anywhere module to track or share privately all of your investments from the convenience of any device.