Correlation Between SoftBank Group and Haleon PLC
Can any of the company-specific risk be diversified away by investing in both SoftBank Group and Haleon PLC 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 Haleon PLC 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 Haleon PLC, you can compare the effects of market volatilities on SoftBank Group and Haleon PLC 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 Haleon PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoftBank Group and Haleon PLC.
Diversification Opportunities for SoftBank Group and Haleon PLC
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SoftBank and Haleon is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding SoftBank Group Corp and Haleon PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haleon 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 Haleon PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haleon PLC has no effect on the direction of SoftBank Group i.e., SoftBank Group and Haleon PLC go up and down completely randomly.
Pair Corralation between SoftBank Group and Haleon PLC
Assuming the 90 days trading horizon SoftBank Group is expected to generate 3.86 times less return on investment than Haleon PLC. In addition to that, SoftBank Group is 3.63 times more volatile than Haleon PLC. It trades about 0.01 of its total potential returns per unit of risk. Haleon PLC is currently generating about 0.11 per unit of volatility. If you would invest 32,465 in Haleon PLC on November 28, 2024 and sell it today you would earn a total of 7,085 from holding Haleon PLC or generate 21.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 70.21% |
| Values | Daily Returns |
SoftBank Group Corp vs. Haleon PLC
Performance |
| Timeline |
| SoftBank Group Corp |
| Haleon PLC |
SoftBank Group and Haleon PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoftBank Group and Haleon PLC
The main advantage of trading using opposite SoftBank Group and Haleon PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoftBank Group position performs unexpectedly, Haleon PLC 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 Haleon PLC will offset losses from the drop in Haleon PLC's long position.| SoftBank Group vs. Broadridge Financial Solutions | SoftBank Group vs. Cairo Communication SpA | SoftBank Group vs. Mobile Tornado Group | SoftBank Group vs. mobilezone holding AG |
| Haleon PLC vs. Impax Environmental Markets | Haleon PLC vs. Fair Oaks Income | Haleon PLC vs. Foresight Environmental Infrastructure | Haleon PLC vs. Norwegian Air Shuttle |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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