Correlation Between SoftBank Group and Las Vegas
Can any of the company-specific risk be diversified away by investing in both SoftBank Group and Las Vegas 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 Las Vegas 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 Las Vegas Sands, you can compare the effects of market volatilities on SoftBank Group and Las Vegas 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 Las Vegas. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoftBank Group and Las Vegas.
Diversification Opportunities for SoftBank Group and Las Vegas
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between SoftBank and Las is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding SoftBank Group Corp and Las Vegas Sands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Las Vegas Sands 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 Las Vegas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Las Vegas Sands has no effect on the direction of SoftBank Group i.e., SoftBank Group and Las Vegas go up and down completely randomly.
Pair Corralation between SoftBank Group and Las Vegas
Assuming the 90 days trading horizon SoftBank Group Corp is expected to generate 1.48 times more return on investment than Las Vegas. However, SoftBank Group is 1.48 times more volatile than Las Vegas Sands. It trades about 0.04 of its potential returns per unit of risk. Las Vegas Sands is currently generating about 0.0 per unit of risk. If you would invest 625,263 in SoftBank Group Corp on August 27, 2024 and sell it today you would earn a total of 233,337 from holding SoftBank Group Corp or generate 37.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 83.22% |
| Values | Daily Returns |
SoftBank Group Corp vs. Las Vegas Sands
Performance |
| Timeline |
| SoftBank Group Corp |
| Las Vegas Sands |
SoftBank Group and Las Vegas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoftBank Group and Las Vegas
The main advantage of trading using opposite SoftBank Group and Las Vegas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoftBank Group position performs unexpectedly, Las Vegas 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 Las Vegas will offset losses from the drop in Las Vegas' long position.| SoftBank Group vs. Toyota Motor Corp | SoftBank Group vs. OTP Bank Nyrt | SoftBank Group vs. Yum Brands | SoftBank Group vs. Cognizant Technology Solutions |
| Las Vegas vs. Samsung Electronics Co | Las Vegas vs. Samsung Electronics Co | Las Vegas vs. Hyundai Motor | Las Vegas vs. Toyota Motor Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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