Correlation Between SoFi Technologies and Astor Star

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

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

Diversification Opportunities for SoFi Technologies and Astor Star

-0.33

Correlation Coefficient

SoFi Technologies  Astor Star

Very good diversification

The 3 months correlation between SoFi and Astor is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SoFi Technologies and Astor Star Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astor Star Fund 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 Astor Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astor Star Fund has no effect on the direction of SoFi Technologies i.e., SoFi Technologies and Astor Star go up and down completely randomly.

Pair Corralation between SoFi Technologies and Astor Star

Given the investment horizon of 90 days SoFi Technologies is expected to generate 5.18 times more return on investment than Astor Star. However, SoFi Technologies is 5.18 times more volatile than Astor Star Fund. It trades about 0.05 of its potential returns per unit of risk. Astor Star Fund is currently generating about -0.11 per unit of risk. If you would invest  745.00  in SoFi Technologies on January 25, 2024 and sell it today you would earn a total of  15.00  from holding SoFi Technologies or generate 2.01% 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.  Astor Star Fund

SoFi Technologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SoFi Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, SoFi Technologies is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Astor Star Fund

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Astor Star Fund are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Astor Star is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SoFi Technologies and Astor Star

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

The idea behind SoFi Technologies and Astor Star Fund 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.