Correlation Between SoftBank Group and Mulberry Group
Can any of the company-specific risk be diversified away by investing in both SoftBank Group and Mulberry 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 Mulberry 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 Mulberry Group PLC, you can compare the effects of market volatilities on SoftBank Group and Mulberry 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 Mulberry Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoftBank Group and Mulberry Group.
Diversification Opportunities for SoftBank Group and Mulberry Group
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SoftBank and Mulberry is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding SoftBank Group Corp and Mulberry Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mulberry 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 Mulberry Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mulberry Group PLC has no effect on the direction of SoftBank Group i.e., SoftBank Group and Mulberry Group go up and down completely randomly.
Pair Corralation between SoftBank Group and Mulberry Group
Assuming the 90 days trading horizon SoftBank Group Corp is expected to generate 0.79 times more return on investment than Mulberry Group. However, SoftBank Group Corp is 1.27 times less risky than Mulberry Group. It trades about 0.07 of its potential returns per unit of risk. Mulberry Group PLC is currently generating about -0.02 per unit of risk. If you would invest 601,917 in SoftBank Group Corp on August 26, 2024 and sell it today you would earn a total of 256,683 from holding SoftBank Group Corp or generate 42.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 76.4% |
| Values | Daily Returns |
SoftBank Group Corp vs. Mulberry Group PLC
Performance |
| Timeline |
| SoftBank Group Corp |
| Mulberry Group PLC |
SoftBank Group and Mulberry Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoftBank Group and Mulberry Group
The main advantage of trading using opposite SoftBank Group and Mulberry Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoftBank Group position performs unexpectedly, Mulberry 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 Mulberry Group will offset losses from the drop in Mulberry Group'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 |
| Mulberry Group vs. Toyota Motor Corp | Mulberry Group vs. SoftBank Group Corp | Mulberry Group vs. OTP Bank Nyrt | Mulberry Group 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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