Correlation Between EM and SOUL

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

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

Diversification Opportunities for EM and SOUL

0.0

Correlation Coefficient

EM  SOUL

Pay attention - limited upside

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

Pair Corralation between EM and SOUL

If you would invest  0.01  in EM on April 21, 2025 and sell it today you would earn a total of  0.00  from holding EM or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

EM  vs.  SOUL

EM

Risk-Adjusted Performance

Very Weak

Over the last 90 days EM has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, EM is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

SOUL

Risk-Adjusted Performance

Very Weak

Over the last 90 days SOUL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for SOUL shareholders.

Pair Trading with EM and SOUL

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

The idea behind EM and SOUL 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.