Correlation Between Axis Bank and SoftBank Group
Can any of the company-specific risk be diversified away by investing in both Axis Bank 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 Axis Bank and SoftBank Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axis Bank Ltd and SoftBank Group Corp, you can compare the effects of market volatilities on Axis Bank 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 Axis Bank with a short position of SoftBank Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axis Bank and SoftBank Group.
Diversification Opportunities for Axis Bank and SoftBank Group
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Axis and SoftBank is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Axis Bank Ltd 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 Axis Bank 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 Axis Bank Ltd 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 Axis Bank i.e., Axis Bank and SoftBank Group go up and down completely randomly.
Pair Corralation between Axis Bank and SoftBank Group
Assuming the 90 days trading horizon Axis Bank Ltd is expected to under-perform the SoftBank Group. But the stock apears to be less risky and, when comparing its historical volatility, Axis Bank Ltd is 1.4 times less risky than SoftBank Group. The stock trades about -0.42 of its potential returns per unit of risk. The SoftBank Group Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 902,500 in SoftBank Group Corp on October 20, 2024 and sell it today you would earn a total of 5,499 from holding SoftBank Group Corp or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.16% |
| Values | Daily Returns |
Axis Bank Ltd vs. SoftBank Group Corp
Performance |
| Timeline |
| Axis Bank |
| SoftBank Group Corp |
Axis Bank and SoftBank Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axis Bank and SoftBank Group
The main advantage of trading using opposite Axis Bank and SoftBank Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axis Bank 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.| Axis Bank vs. Dairy Farm International | Axis Bank vs. Tyson Foods Cl | Axis Bank vs. JD Sports Fashion | Axis Bank vs. Compagnie Plastic Omnium |
| SoftBank Group vs. GlobalData PLC | SoftBank Group vs. British American Tobacco | SoftBank Group vs. Public Storage | SoftBank Group vs. Premier Foods PLC |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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