Correlation Between SOFI TECHNOLOGIES and KURITA WTR

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

By analyzing existing cross correlation between SOFI TECHNOLOGIES and KURITA WTR INDUNSPADR, you can compare the effects of market volatilities on SOFI TECHNOLOGIES and KURITA WTR 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 KURITA WTR. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFI TECHNOLOGIES and KURITA WTR.

Diversification Opportunities for SOFI TECHNOLOGIES and KURITA WTR

0.54

Correlation Coefficient

SOFI TECHNOLOGIES  KURITA WTR

Very weak diversification

The 3 months correlation between SOFI and KURITA is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SOFI TECHNOLOGIES and KURITA WTR INDUNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KURITA WTR INDUNSPADR 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 KURITA WTR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KURITA WTR INDUNSPADR has no effect on the direction of SOFI TECHNOLOGIES i.e., SOFI TECHNOLOGIES and KURITA WTR go up and down completely randomly.

Pair Corralation between SOFI TECHNOLOGIES and KURITA WTR

Assuming the 90 days horizon SOFI TECHNOLOGIES is expected to generate 1.48 times more return on investment than KURITA WTR. However, SOFI TECHNOLOGIES is 1.48 times more volatile than KURITA WTR INDUNSPADR. It trades about 0.28 of its potential returns per unit of risk. KURITA WTR INDUNSPADR is currently generating about 0.08 per unit of risk. If you would invest  1,085  in SOFI TECHNOLOGIES on April 24, 2025 and sell it today you would earn a total of  761.00  from holding SOFI TECHNOLOGIES or generate 70.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

SOFI TECHNOLOGIES  vs.  KURITA WTR INDUNSPADR

SOFI TECHNOLOGIES

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SOFI TECHNOLOGIES are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SOFI TECHNOLOGIES reported solid returns over the last few months and may actually be approaching a breakup point.

KURITA WTR INDUNSPADR

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in KURITA WTR INDUNSPADR are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating forward indicators, KURITA WTR may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with SOFI TECHNOLOGIES and KURITA WTR

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

The idea behind SOFI TECHNOLOGIES and KURITA WTR INDUNSPADR 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.