Correlation Between SoftBank Group and Ametek
Can any of the company-specific risk be diversified away by investing in both SoftBank Group and Ametek 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 SoftBank Group and Ametek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SoftBank Group Corp and Ametek Inc, you can compare the effects of market volatilities on SoftBank Group and Ametek 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 SoftBank Group with a short position of Ametek. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoftBank Group and Ametek.
Diversification Opportunities for SoftBank Group and Ametek
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SoftBank and Ametek is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding SoftBank Group Corp and Ametek Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ametek Inc and SoftBank Group 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 SoftBank Group Corp are associated (or correlated) with Ametek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ametek Inc has no effect on the direction of SoftBank Group i.e., SoftBank Group and Ametek go up and down completely randomly.
Pair Corralation between SoftBank Group and Ametek
Assuming the 90 days trading horizon SoftBank Group Corp is expected to generate 1.98 times more return on investment than Ametek. However, SoftBank Group is 1.98 times more volatile than Ametek Inc. It trades about 0.06 of its potential returns per unit of risk. Ametek Inc is currently generating about 0.05 per unit of risk. If you would invest 583,236 in SoftBank Group Corp on October 10, 2024 and sell it today you would earn a total of 366,564 from holding SoftBank Group Corp or generate 62.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 84.2% |
| Values | Daily Returns |
SoftBank Group Corp vs. Ametek Inc
Performance |
| Timeline |
| SoftBank Group Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Ametek Inc |
SoftBank Group and Ametek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoftBank Group and Ametek
The main advantage of trading using opposite SoftBank Group and Ametek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoftBank Group position performs unexpectedly, Ametek 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 Ametek will offset losses from the drop in Ametek's long position.| SoftBank Group vs. MoneysupermarketCom Group PLC | SoftBank Group vs. Melia Hotels | SoftBank Group vs. Fevertree Drinks Plc | SoftBank Group vs. United Utilities Group |
| Ametek vs. bet at home AG | Ametek vs. Aeorema Communications Plc | Ametek vs. Planet Fitness Cl | Ametek vs. Zoom Video Communications |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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