Correlation Between AcadeMedia and SoftBank Group
Can any of the company-specific risk be diversified away by investing in both AcadeMedia and SoftBank 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 AcadeMedia and SoftBank Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AcadeMedia AB and SoftBank Group Corp, you can compare the effects of market volatilities on AcadeMedia and SoftBank 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 AcadeMedia with a short position of SoftBank Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AcadeMedia and SoftBank Group.
Diversification Opportunities for AcadeMedia and SoftBank Group
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AcadeMedia and SoftBank is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding AcadeMedia AB and SoftBank Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoftBank Group Corp and AcadeMedia 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 AcadeMedia AB are associated (or correlated) with SoftBank Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SoftBank Group Corp has no effect on the direction of AcadeMedia i.e., AcadeMedia and SoftBank Group go up and down completely randomly.
Pair Corralation between AcadeMedia and SoftBank Group
Assuming the 90 days trading horizon AcadeMedia AB is expected to generate 0.5 times more return on investment than SoftBank Group. However, AcadeMedia AB is 1.98 times less risky than SoftBank Group. It trades about -0.2 of its potential returns per unit of risk. SoftBank Group Corp is currently generating about -0.17 per unit of risk. If you would invest 6,420 in AcadeMedia AB on August 28, 2024 and sell it today you would lose (320.00) from holding AcadeMedia AB or give up 4.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
AcadeMedia AB vs. SoftBank Group Corp
Performance |
| Timeline |
| AcadeMedia AB |
| SoftBank Group Corp |
AcadeMedia and SoftBank Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AcadeMedia and SoftBank Group
The main advantage of trading using opposite AcadeMedia and SoftBank Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AcadeMedia position performs unexpectedly, SoftBank 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 SoftBank Group will offset losses from the drop in SoftBank Group's long position.| AcadeMedia vs. Blackrock World Mining | AcadeMedia vs. Endeavour Mining Corp | AcadeMedia vs. JLEN Environmental Assets | AcadeMedia vs. Tata Steel Limited |
| SoftBank Group vs. Toyota Motor Corp | SoftBank Group vs. OTP Bank Nyrt | SoftBank Group vs. Yum Brands | SoftBank Group vs. Cognizant Technology Solutions |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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