Correlation Between SoftBank Group and Hilton Food
Can any of the company-specific risk be diversified away by investing in both SoftBank Group and Hilton Food 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 Hilton Food 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 Hilton Food Group, you can compare the effects of market volatilities on SoftBank Group and Hilton Food 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 Hilton Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoftBank Group and Hilton Food.
Diversification Opportunities for SoftBank Group and Hilton Food
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SoftBank and Hilton is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding SoftBank Group Corp and Hilton Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hilton Food 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 Hilton Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hilton Food Group has no effect on the direction of SoftBank Group i.e., SoftBank Group and Hilton Food go up and down completely randomly.
Pair Corralation between SoftBank Group and Hilton Food
Assuming the 90 days trading horizon SoftBank Group Corp is expected to generate 2.16 times more return on investment than Hilton Food. However, SoftBank Group is 2.16 times more volatile than Hilton Food Group. It trades about 0.03 of its potential returns per unit of risk. Hilton Food Group is currently generating about 0.05 per unit of risk. If you would invest 876,076 in SoftBank Group Corp on October 22, 2024 and sell it today you would earn a total of 51,024 from holding SoftBank Group Corp or generate 5.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 74.24% |
| Values | Daily Returns |
SoftBank Group Corp vs. Hilton Food Group
Performance |
| Timeline |
| SoftBank Group Corp |
| Hilton Food Group |
SoftBank Group and Hilton Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoftBank Group and Hilton Food
The main advantage of trading using opposite SoftBank Group and Hilton Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoftBank Group position performs unexpectedly, Hilton Food 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 Hilton Food will offset losses from the drop in Hilton Food's long position.| SoftBank Group vs. MoneysupermarketCom Group PLC | SoftBank Group vs. Ashtead Technology Holdings | SoftBank Group vs. Vitec Software Group | SoftBank Group vs. Xeros Technology Group |
| Hilton Food vs. International Biotechnology Trust | Hilton Food vs. United Airlines Holdings | Hilton Food vs. Tatton Asset Management | Hilton Food vs. Liontrust 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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