Correlation Between SoftBank Group and Sealed Air
Can any of the company-specific risk be diversified away by investing in both SoftBank Group and Sealed Air 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 Sealed Air 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 Sealed Air Corp, you can compare the effects of market volatilities on SoftBank Group and Sealed Air 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 Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoftBank Group and Sealed Air.
Diversification Opportunities for SoftBank Group and Sealed Air
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SoftBank and Sealed is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding SoftBank Group Corp and Sealed Air Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air Corp 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 Sealed Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sealed Air Corp has no effect on the direction of SoftBank Group i.e., SoftBank Group and Sealed Air go up and down completely randomly.
Pair Corralation between SoftBank Group and Sealed Air
Assuming the 90 days trading horizon SoftBank Group Corp is expected to generate 1.74 times more return on investment than Sealed Air. However, SoftBank Group is 1.74 times more volatile than Sealed Air Corp. It trades about 0.08 of its potential returns per unit of risk. Sealed Air Corp is currently generating about 0.01 per unit of risk. If you would invest 639,950 in SoftBank Group Corp on November 9, 2024 and sell it today you would earn a total of 336,650 from holding SoftBank Group Corp or generate 52.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 78.66% |
| Values | Daily Returns |
SoftBank Group Corp vs. Sealed Air Corp
Performance |
| Timeline |
| SoftBank Group Corp |
| Sealed Air Corp |
SoftBank Group and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoftBank Group and Sealed Air
The main advantage of trading using opposite SoftBank Group and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoftBank Group position performs unexpectedly, Sealed Air 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 Sealed Air will offset losses from the drop in Sealed Air's long position.| SoftBank Group vs. iShares Physical Silver | SoftBank Group vs. Pan American Silver | SoftBank Group vs. Vietnam Enterprise Investments | SoftBank Group vs. AfriTin Mining |
| Sealed Air vs. Batm Advanced Communications | Sealed Air vs. United Internet AG | Sealed Air vs. Alfa Financial Software | Sealed Air vs. Capital Drilling |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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