Correlation Between Eclectic Bar and SoftBank Group
Can any of the company-specific risk be diversified away by investing in both Eclectic Bar 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 Eclectic Bar and SoftBank Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eclectic Bar Group and SoftBank Group Corp, you can compare the effects of market volatilities on Eclectic Bar 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 Eclectic Bar with a short position of SoftBank Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eclectic Bar and SoftBank Group.
Diversification Opportunities for Eclectic Bar and SoftBank Group
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eclectic and SoftBank is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Eclectic Bar Group 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 Eclectic Bar 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 Eclectic Bar Group 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 Eclectic Bar i.e., Eclectic Bar and SoftBank Group go up and down completely randomly.
Pair Corralation between Eclectic Bar and SoftBank Group
Assuming the 90 days trading horizon Eclectic Bar Group is expected to generate 1.92 times more return on investment than SoftBank Group. However, Eclectic Bar is 1.92 times more volatile than SoftBank Group Corp. It trades about 0.04 of its potential returns per unit of risk. SoftBank Group Corp is currently generating about 0.05 per unit of risk. If you would invest 2,600 in Eclectic Bar Group on September 24, 2024 and sell it today you would earn a total of 2,100 from holding Eclectic Bar Group or generate 80.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 82.04% |
| Values | Daily Returns |
Eclectic Bar Group vs. SoftBank Group Corp
Performance |
| Timeline |
| Eclectic Bar Group |
| SoftBank Group Corp |
Eclectic Bar and SoftBank Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eclectic Bar and SoftBank Group
The main advantage of trading using opposite Eclectic Bar and SoftBank Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eclectic Bar 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.| Eclectic Bar vs. Toyota Motor Corp | Eclectic Bar vs. SoftBank Group Corp | Eclectic Bar vs. OTP Bank Nyrt | Eclectic Bar vs. Newmont Corp |
| SoftBank Group vs. Roebuck Food Group | SoftBank Group vs. Grand Vision Media | SoftBank Group vs. Everyman Media Group | SoftBank Group vs. Travel Leisure Co |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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