Correlation Between SoftBank Group and Young Cos
Can any of the company-specific risk be diversified away by investing in both SoftBank Group and Young Cos 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 Young Cos 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 Young Cos Brewery, you can compare the effects of market volatilities on SoftBank Group and Young Cos 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 Young Cos. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoftBank Group and Young Cos.
Diversification Opportunities for SoftBank Group and Young Cos
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SoftBank and Young is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding SoftBank Group Corp and Young Cos Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Young Cos Brewery 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 Young Cos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Young Cos Brewery has no effect on the direction of SoftBank Group i.e., SoftBank Group and Young Cos go up and down completely randomly.
Pair Corralation between SoftBank Group and Young Cos
Assuming the 90 days trading horizon SoftBank Group Corp is expected to under-perform the Young Cos. In addition to that, SoftBank Group is 1.93 times more volatile than Young Cos Brewery. It trades about -0.03 of its total potential returns per unit of risk. Young Cos Brewery is currently generating about 0.07 per unit of volatility. If you would invest 60,883 in Young Cos Brewery on August 25, 2024 and sell it today you would earn a total of 1,317 from holding Young Cos Brewery or generate 2.16% 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. Young Cos Brewery
Performance |
| Timeline |
| SoftBank Group Corp |
| Young Cos Brewery |
SoftBank Group and Young Cos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoftBank Group and Young Cos
The main advantage of trading using opposite SoftBank Group and Young Cos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoftBank Group position performs unexpectedly, Young Cos 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 Young Cos will offset losses from the drop in Young Cos' 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 |
| Young Cos vs. Samsung Electronics Co | Young Cos vs. Samsung Electronics Co | Young Cos vs. Toyota Motor Corp | Young Cos vs. Hon Hai Precision |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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