Correlation Between SoftBank Group and BH Macro
Can any of the company-specific risk be diversified away by investing in both SoftBank Group and BH Macro 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 BH Macro 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 BH Macro Limited, you can compare the effects of market volatilities on SoftBank Group and BH Macro 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 BH Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoftBank Group and BH Macro.
Diversification Opportunities for SoftBank Group and BH Macro
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SoftBank and BHMG is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding SoftBank Group Corp and BH Macro Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BH Macro Limited 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 BH Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BH Macro Limited has no effect on the direction of SoftBank Group i.e., SoftBank Group and BH Macro go up and down completely randomly.
Pair Corralation between SoftBank Group and BH Macro
Assuming the 90 days trading horizon SoftBank Group Corp is expected to under-perform the BH Macro. In addition to that, SoftBank Group is 1.81 times more volatile than BH Macro Limited. It trades about -0.19 of its total potential returns per unit of risk. BH Macro Limited is currently generating about 0.16 per unit of volatility. If you would invest 38,800 in BH Macro Limited on September 1, 2024 and sell it today you would earn a total of 1,700 from holding BH Macro Limited or generate 4.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 73.91% |
| Values | Daily Returns |
SoftBank Group Corp vs. BH Macro Limited
Performance |
| Timeline |
| SoftBank Group Corp |
| BH Macro Limited |
SoftBank Group and BH Macro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoftBank Group and BH Macro
The main advantage of trading using opposite SoftBank Group and BH Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoftBank Group position performs unexpectedly, BH Macro 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 BH Macro will offset losses from the drop in BH Macro's long position.| SoftBank Group vs. Blackrock World Mining | SoftBank Group vs. Batm Advanced Communications | SoftBank Group vs. GoldMining | SoftBank Group vs. Gamma Communications PLC |
| BH Macro vs. Toyota Motor Corp | BH Macro vs. SoftBank Group Corp | BH Macro vs. OTP Bank Nyrt | BH Macro vs. Las Vegas Sands |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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