Correlation Between SOS and GoPro

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

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

Diversification Opportunities for SOS and GoPro

0.6

Correlation Coefficient

SOS  GoPro

Poor diversification

The 3 months correlation between SOS and GoPro is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding SOS Limited and GoPro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoPro Inc and SOS 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 SOS Limited are associated (or correlated) with GoPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoPro Inc has no effect on the direction of SOS i.e., SOS and GoPro go up and down completely randomly.

Pair Corralation between SOS and GoPro

Considering the 90-day investment horizon SOS Limited is expected to generate 1.23 times more return on investment than GoPro. However, SOS is 1.23 times more volatile than GoPro Inc. It trades about 0.19 of its potential returns per unit of risk. GoPro Inc is currently generating about 0.2 per unit of risk. If you would invest  423.00  in SOS Limited on April 21, 2025 and sell it today you would earn a total of  390.00  from holding SOS Limited or generate 92.2% return on investment over 90 days.

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

SOS Limited  vs.  GoPro Inc

SOS Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SOS Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SOS unveiled solid returns over the last few months and may actually be approaching a breakup point.

GoPro Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GoPro Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, GoPro displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SOS and GoPro

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

The idea behind SOS Limited and GoPro Inc 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.

Check out your portfolio center.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.