Correlation Between SOFR and COLGATE
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By analyzing existing cross correlation between SOFR and COLGATE PALMOLIVE MEDIUM TERM, you can compare the effects of market volatilities on SOFR and COLGATE 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 SOFR with a short position of COLGATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFR and COLGATE.
Diversification Opportunities for SOFR and COLGATE
Pay attention - limited upside
The 3 months correlation between SOFR and COLGATE is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding SOFR and COLGATE PALMOLIVE MEDIUM TERM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COLGATE PALMOLIVE and SOFR 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 SOFR are associated (or correlated) with COLGATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COLGATE PALMOLIVE has no effect on the direction of SOFR i.e., SOFR and COLGATE go up and down completely randomly.
Pair Corralation between SOFR and COLGATE
Given the investment horizon of 90 days SOFR is expected to generate 0.03 times more return on investment than COLGATE. However, SOFR is 29.81 times less risky than COLGATE. It trades about 0.5 of its potential returns per unit of risk. COLGATE PALMOLIVE MEDIUM TERM is currently generating about -0.08 per unit of risk. If you would invest 9,939 in SOFR on September 25, 2024 and sell it today you would earn a total of 113.00 from holding SOFR or generate 1.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 73.44% |
Values | Daily Returns |
SOFR vs. COLGATE PALMOLIVE MEDIUM TERM
Performance |
Timeline |
SOFR |
COLGATE PALMOLIVE |
SOFR and COLGATE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SOFR and COLGATE
The main advantage of trading using opposite SOFR and COLGATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFR position performs unexpectedly, COLGATE 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 COLGATE will offset losses from the drop in COLGATE's long position.SOFR vs. Vanguard Total Stock | SOFR vs. SPDR SP 500 | SOFR vs. iShares Core SP | SOFR vs. Vanguard Total Bond |
COLGATE vs. Mangazeya Mining | COLGATE vs. Evolution Mining | COLGATE vs. Everspin Technologies | COLGATE vs. Zijin Mining Group |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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