Correlation Between SoftBank Group and ASOS Plc
Can any of the company-specific risk be diversified away by investing in both SoftBank Group and ASOS Plc 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 ASOS Plc 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 ASOS Plc, you can compare the effects of market volatilities on SoftBank Group and ASOS Plc 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 ASOS Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoftBank Group and ASOS Plc.
Diversification Opportunities for SoftBank Group and ASOS Plc
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SoftBank and ASOS is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding SoftBank Group Corp and ASOS Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASOS Plc 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 ASOS Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASOS Plc has no effect on the direction of SoftBank Group i.e., SoftBank Group and ASOS Plc go up and down completely randomly.
Pair Corralation between SoftBank Group and ASOS Plc
Assuming the 90 days trading horizon SoftBank Group Corp is expected to generate 1.66 times more return on investment than ASOS Plc. However, SoftBank Group is 1.66 times more volatile than ASOS Plc. It trades about 0.04 of its potential returns per unit of risk. ASOS Plc is currently generating about -0.03 per unit of risk. If you would invest 929,927 in SoftBank Group Corp on November 3, 2024 and sell it today you would earn a total of 11,173 from holding SoftBank Group Corp or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 73.91% |
| Values | Daily Returns |
SoftBank Group Corp vs. ASOS Plc
Performance |
| Timeline |
| SoftBank Group Corp |
| ASOS Plc |
SoftBank Group and ASOS Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoftBank Group and ASOS Plc
The main advantage of trading using opposite SoftBank Group and ASOS Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoftBank Group position performs unexpectedly, ASOS Plc 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 ASOS Plc will offset losses from the drop in ASOS Plc's long position.| SoftBank Group vs. Eco Animal Health | SoftBank Group vs. EJF Investments | SoftBank Group vs. Bankers Investment Trust | SoftBank Group vs. Scandinavian Tobacco Group |
| ASOS Plc vs. Cairo Communication SpA | ASOS Plc vs. BW Offshore | ASOS Plc vs. Logitech International SA | ASOS Plc vs. Made Tech Group |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |