Correlation Between SoftBank Group and Atome Energy
Can any of the company-specific risk be diversified away by investing in both SoftBank Group and Atome Energy 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 Atome Energy 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 Atome Energy PLC, you can compare the effects of market volatilities on SoftBank Group and Atome Energy 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 Atome Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoftBank Group and Atome Energy.
Diversification Opportunities for SoftBank Group and Atome Energy
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SoftBank and Atome is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding SoftBank Group Corp and Atome Energy PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atome Energy 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 Atome Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atome Energy PLC has no effect on the direction of SoftBank Group i.e., SoftBank Group and Atome Energy go up and down completely randomly.
Pair Corralation between SoftBank Group and Atome Energy
Assuming the 90 days trading horizon SoftBank Group Corp is expected to generate 1.39 times more return on investment than Atome Energy. However, SoftBank Group is 1.39 times more volatile than Atome Energy PLC. It trades about 0.4 of its potential returns per unit of risk. Atome Energy PLC is currently generating about 0.01 per unit of risk. If you would invest 918,500 in SoftBank Group Corp on October 26, 2024 and sell it today you would earn a total of 150,500 from holding SoftBank Group Corp or generate 16.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 63.16% |
| Values | Daily Returns |
SoftBank Group Corp vs. Atome Energy PLC
Performance |
| Timeline |
| SoftBank Group Corp |
| Atome Energy PLC |
SoftBank Group and Atome Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoftBank Group and Atome Energy
The main advantage of trading using opposite SoftBank Group and Atome Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoftBank Group position performs unexpectedly, Atome Energy 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 Atome Energy will offset losses from the drop in Atome Energy's long position.| SoftBank Group vs. Cairo Communication SpA | SoftBank Group vs. AMG Advanced Metallurgical | SoftBank Group vs. Capital Metals PLC | SoftBank Group vs. Power Metal Resources |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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