Correlation Between SoFi Technologies and Calbee

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

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

Diversification Opportunities for SoFi Technologies and Calbee

0.64

Correlation Coefficient

SoFi Technologies  Calbee

Poor diversification

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

Pair Corralation between SoFi Technologies and Calbee

If you would invest  996.00  in SoFi Technologies on September 19, 2024 and sell it today you would earn a total of  670.00  from holding SoFi Technologies or generate 67.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.4%
Values	Daily Returns

SoFi Technologies  vs.  Calbee Inc

SoFi Technologies

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in SoFi Technologies are ranked lower than 28 (%) 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.

Calbee Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with SoFi Technologies and Calbee

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

The idea behind SoFi Technologies and Calbee Inc 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.