Correlation Between SoftBank Group and Medical Properties
Can any of the company-specific risk be diversified away by investing in both SoftBank Group and Medical Properties 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 Medical Properties 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 Medical Properties Trust, you can compare the effects of market volatilities on SoftBank Group and Medical Properties 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 Medical Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoftBank Group and Medical Properties.
Diversification Opportunities for SoftBank Group and Medical Properties
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SoftBank and Medical is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding SoftBank Group Corp and Medical Properties Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Properties Trust 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 Medical Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Properties Trust has no effect on the direction of SoftBank Group i.e., SoftBank Group and Medical Properties go up and down completely randomly.
Pair Corralation between SoftBank Group and Medical Properties
Assuming the 90 days trading horizon SoftBank Group Corp is expected to generate 0.87 times more return on investment than Medical Properties. However, SoftBank Group Corp is 1.15 times less risky than Medical Properties. It trades about 0.29 of its potential returns per unit of risk. Medical Properties Trust is currently generating about 0.22 per unit of risk. If you would invest 918,500 in SoftBank Group Corp on October 25, 2024 and sell it today you would earn a total of 94,000 from holding SoftBank Group Corp or generate 10.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 55.0% |
| Values | Daily Returns |
SoftBank Group Corp vs. Medical Properties Trust
Performance |
| Timeline |
| SoftBank Group Corp |
| Medical Properties Trust |
SoftBank Group and Medical Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoftBank Group and Medical Properties
The main advantage of trading using opposite SoftBank Group and Medical Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoftBank Group position performs unexpectedly, Medical Properties 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 Medical Properties will offset losses from the drop in Medical Properties' long position.| SoftBank Group vs. PPHE Hotel Group | SoftBank Group vs. Spotify Technology SA | SoftBank Group vs. British American Tobacco | SoftBank Group vs. DXC Technology Co |
| Medical Properties vs. Toyota Motor Corp | Medical Properties vs. SoftBank Group Corp | Medical Properties vs. OTP Bank Nyrt | Medical Properties vs. ONEOK Inc |
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 CEOs Directory module to screen CEOs from public companies around the world.
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