Correlation Between SERI INDUSTRIAL and SOFI TECHNOLOGIES

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Can any of the company-specific risk be diversified away by investing in both SERI INDUSTRIAL and SOFI TECHNOLOGIES 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 SERI INDUSTRIAL and SOFI TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SERI INDUSTRIAL EO and SOFI TECHNOLOGIES, you can compare the effects of market volatilities on SERI INDUSTRIAL and SOFI TECHNOLOGIES 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 SERI INDUSTRIAL with a short position of SOFI TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of SERI INDUSTRIAL and SOFI TECHNOLOGIES.

Diversification Opportunities for SERI INDUSTRIAL and SOFI TECHNOLOGIES

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between SERI INDUSTRIAL and SOFI TECHNOLOGIES

Assuming the 90 days trading horizon SERI INDUSTRIAL is expected to generate 20.29 times less return on investment than SOFI TECHNOLOGIES. In addition to that, SERI INDUSTRIAL is 1.19 times more volatile than SOFI TECHNOLOGIES. It trades about 0.01 of its total potential returns per unit of risk. SOFI TECHNOLOGIES is currently generating about 0.32 per unit of volatility. If you would invest  979.00  in SOFI TECHNOLOGIES on April 21, 2025 and sell it today you would earn a total of  879.00  from holding SOFI TECHNOLOGIES or generate 89.79% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

SERI INDUSTRIAL EO  vs.  SOFI TECHNOLOGIES

 Performance 
       Timeline  
SERI INDUSTRIAL EO 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in SERI INDUSTRIAL EO are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, SERI INDUSTRIAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
SOFI TECHNOLOGIES 

Risk-Adjusted Performance

Strong

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in SOFI TECHNOLOGIES are ranked lower than 24 (%) 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.

SERI INDUSTRIAL and SOFI TECHNOLOGIES Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SERI INDUSTRIAL and SOFI TECHNOLOGIES

The main advantage of trading using opposite SERI INDUSTRIAL and SOFI TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SERI INDUSTRIAL position performs unexpectedly, SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES will offset losses from the drop in SOFI TECHNOLOGIES's long position.
The idea behind SERI INDUSTRIAL EO and SOFI TECHNOLOGIES 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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