Correlation Between SoftBank Group and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both SoftBank Group and Catalyst Media 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 Catalyst Media 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 Catalyst Media Group, you can compare the effects of market volatilities on SoftBank Group and Catalyst Media 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 Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoftBank Group and Catalyst Media.
Diversification Opportunities for SoftBank Group and Catalyst Media
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SoftBank and Catalyst is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding SoftBank Group Corp and Catalyst Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Media 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 Catalyst Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Media Group has no effect on the direction of SoftBank Group i.e., SoftBank Group and Catalyst Media go up and down completely randomly.
Pair Corralation between SoftBank Group and Catalyst Media
Assuming the 90 days trading horizon SoftBank Group Corp is expected to under-perform the Catalyst Media. In addition to that, SoftBank Group is 1.26 times more volatile than Catalyst Media Group. It trades about -0.03 of its total potential returns per unit of risk. Catalyst Media Group is currently generating about 0.04 per unit of volatility. If you would invest 9,500 in Catalyst Media Group on August 25, 2024 and sell it today you would earn a total of 150.00 from holding Catalyst Media Group or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 78.26% |
| Values | Daily Returns |
SoftBank Group Corp vs. Catalyst Media Group
Performance |
| Timeline |
| SoftBank Group Corp |
| Catalyst Media Group |
SoftBank Group and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoftBank Group and Catalyst Media
The main advantage of trading using opposite SoftBank Group and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoftBank Group position performs unexpectedly, Catalyst Media 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 Catalyst Media will offset losses from the drop in Catalyst Media's long position.| SoftBank Group vs. Lords Grp Trading | SoftBank Group vs. JLEN Environmental Assets | SoftBank Group vs. Baker Steel Resources | SoftBank Group vs. Oakley Capital Investments |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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