Correlation Between SoftBank Group and Burberry Group
Can any of the company-specific risk be diversified away by investing in both SoftBank Group and Burberry Group 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 Burberry Group 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 Burberry Group PLC, you can compare the effects of market volatilities on SoftBank Group and Burberry Group 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 Burberry Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoftBank Group and Burberry Group.
Diversification Opportunities for SoftBank Group and Burberry Group
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SoftBank and Burberry is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding SoftBank Group Corp and Burberry Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burberry Group 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 Burberry Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burberry Group PLC has no effect on the direction of SoftBank Group i.e., SoftBank Group and Burberry Group go up and down completely randomly.
Pair Corralation between SoftBank Group and Burberry Group
Assuming the 90 days trading horizon SoftBank Group Corp is expected to under-perform the Burberry Group. But the stock apears to be less risky and, when comparing its historical volatility, SoftBank Group Corp is 2.51 times less risky than Burberry Group. The stock trades about -0.19 of its potential returns per unit of risk. The Burberry Group PLC is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 76,020 in Burberry Group PLC on August 31, 2024 and sell it today you would earn a total of 13,200 from holding Burberry Group PLC or generate 17.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 81.82% |
| Values | Daily Returns |
SoftBank Group Corp vs. Burberry Group PLC
Performance |
| Timeline |
| SoftBank Group Corp |
| Burberry Group PLC |
SoftBank Group and Burberry Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoftBank Group and Burberry Group
The main advantage of trading using opposite SoftBank Group and Burberry Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoftBank Group position performs unexpectedly, Burberry Group 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 Burberry Group will offset losses from the drop in Burberry Group's long position.| SoftBank Group vs. GoldMining | SoftBank Group vs. Beowulf Mining | SoftBank Group vs. Ecclesiastical Insurance Office | SoftBank Group vs. Silvercorp Metals |
| Burberry Group vs. SBM Offshore NV | Burberry Group vs. Charter Communications Cl | Burberry Group vs. Cairo Communication SpA | Burberry Group vs. Aeorema Communications Plc |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |