Correlation Between Sunny Optical and SoftBank Group
Can any of the company-specific risk be diversified away by investing in both Sunny Optical 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 Sunny Optical and SoftBank Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunny Optical Technology and SoftBank Group Corp, you can compare the effects of market volatilities on Sunny Optical 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 Sunny Optical with a short position of SoftBank Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and SoftBank Group.
Diversification Opportunities for Sunny Optical and SoftBank Group
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunny and SoftBank is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology 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 Sunny Optical 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 Sunny Optical Technology 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 Sunny Optical i.e., Sunny Optical and SoftBank Group go up and down completely randomly.
Pair Corralation between Sunny Optical and SoftBank Group
Assuming the 90 days trading horizon Sunny Optical Technology is expected to under-perform the SoftBank Group. In addition to that, Sunny Optical is 1.16 times more volatile than SoftBank Group Corp. It trades about -0.04 of its total potential returns per unit of risk. SoftBank Group Corp is currently generating about -0.02 per unit of volatility. If you would invest 942,999 in SoftBank Group Corp on October 16, 2024 and sell it today you would lose (8,999) from holding SoftBank Group Corp or give up 0.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 68.42% |
| Values | Daily Returns |
Sunny Optical Technology vs. SoftBank Group Corp
Performance |
| Timeline |
| Sunny Optical Technology |
| SoftBank Group Corp |
Sunny Optical and SoftBank Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and SoftBank Group
The main advantage of trading using opposite Sunny Optical and SoftBank Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical 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.| Sunny Optical vs. Eastinco Mining Exploration | Sunny Optical vs. Naked Wines plc | Sunny Optical vs. AcadeMedia AB | Sunny Optical vs. Prosiebensat 1 Media |
| SoftBank Group vs. Sunny Optical Technology | SoftBank Group vs. CAP LEASE AVIATION | SoftBank Group vs. Alfa Financial Software | SoftBank Group vs. JB Hunt Transport |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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