Correlation Between SOFI TECHNOLOGIES and CSL

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

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

Diversification Opportunities for SOFI TECHNOLOGIES and CSL

0.42

Correlation Coefficient

SOFI TECHNOLOGIES  CSL

Very weak diversification

The 3 months correlation between SOFI and CSL is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding SOFI TECHNOLOGIES and CSL LTD SPONADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL LTD SPONADR 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 CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL LTD SPONADR has no effect on the direction of SOFI TECHNOLOGIES i.e., SOFI TECHNOLOGIES and CSL go up and down completely randomly.

Pair Corralation between SOFI TECHNOLOGIES and CSL

Assuming the 90 days horizon SOFI TECHNOLOGIES is expected to generate 2.53 times more return on investment than CSL. However, SOFI TECHNOLOGIES is 2.53 times more volatile than CSL LTD SPONADR. It trades about 0.23 of its potential returns per unit of risk. CSL LTD SPONADR is currently generating about 0.12 per unit of risk. If you would invest  1,176  in SOFI TECHNOLOGIES on May 8, 2025 and sell it today you would earn a total of  717.00  from holding SOFI TECHNOLOGIES or generate 60.97% 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.  CSL LTD SPONADR

SOFI TECHNOLOGIES

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SOFI TECHNOLOGIES are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, SOFI TECHNOLOGIES reported solid returns over the last few months and may actually be approaching a breakup point.

CSL LTD SPONADR

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in CSL LTD SPONADR are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady forward-looking indicators, CSL may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with SOFI TECHNOLOGIES and CSL

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

The idea behind SOFI TECHNOLOGIES and CSL LTD SPONADR 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.