Correlation Between SoftBank Group and Eclectic Bar
Can any of the company-specific risk be diversified away by investing in both SoftBank Group and Eclectic Bar 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 Eclectic Bar 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 Eclectic Bar Group, you can compare the effects of market volatilities on SoftBank Group and Eclectic Bar 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 Eclectic Bar. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoftBank Group and Eclectic Bar.
Diversification Opportunities for SoftBank Group and Eclectic Bar
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SoftBank and Eclectic is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding SoftBank Group Corp and Eclectic Bar Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eclectic Bar Group 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 Eclectic Bar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eclectic Bar Group has no effect on the direction of SoftBank Group i.e., SoftBank Group and Eclectic Bar go up and down completely randomly.
Pair Corralation between SoftBank Group and Eclectic Bar
Assuming the 90 days trading horizon SoftBank Group Corp is expected to generate 0.56 times more return on investment than Eclectic Bar. However, SoftBank Group Corp is 1.77 times less risky than Eclectic Bar. It trades about 0.06 of its potential returns per unit of risk. Eclectic Bar Group is currently generating about 0.03 per unit of risk. If you would invest 581,913 in SoftBank Group Corp on November 7, 2024 and sell it today you would earn a total of 359,187 from holding SoftBank Group Corp or generate 61.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 81.09% |
| Values | Daily Returns |
SoftBank Group Corp vs. Eclectic Bar Group
Performance |
| Timeline |
| SoftBank Group Corp |
| Eclectic Bar Group |
SoftBank Group and Eclectic Bar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoftBank Group and Eclectic Bar
The main advantage of trading using opposite SoftBank Group and Eclectic Bar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoftBank Group position performs unexpectedly, Eclectic Bar 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 Eclectic Bar will offset losses from the drop in Eclectic Bar's long position.| SoftBank Group vs. Dairy Farm International | SoftBank Group vs. United Utilities Group | SoftBank Group vs. Pressure Technologies Plc | SoftBank Group vs. Playtech Plc |
| Eclectic Bar vs. Bank of Ireland | Eclectic Bar vs. Nordea Bank Abp | Eclectic Bar vs. St Galler Kantonalbank | Eclectic Bar vs. Tatton Asset Management |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |