Correlation Between CAP LEASE and SoftBank Group
Can any of the company-specific risk be diversified away by investing in both CAP LEASE 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 CAP LEASE and SoftBank Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAP LEASE AVIATION and SoftBank Group Corp, you can compare the effects of market volatilities on CAP LEASE 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 CAP LEASE with a short position of SoftBank Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAP LEASE and SoftBank Group.
Diversification Opportunities for CAP LEASE and SoftBank Group
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CAP and SoftBank is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding CAP LEASE AVIATION 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 CAP LEASE 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 CAP LEASE AVIATION 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 CAP LEASE i.e., CAP LEASE and SoftBank Group go up and down completely randomly.
Pair Corralation between CAP LEASE and SoftBank Group
Assuming the 90 days trading horizon CAP LEASE is expected to generate 6.55 times less return on investment than SoftBank Group. But when comparing it to its historical volatility, CAP LEASE AVIATION is 4.49 times less risky than SoftBank Group. It trades about 0.16 of its potential returns per unit of risk. SoftBank Group Corp is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 890,600 in SoftBank Group Corp on October 30, 2024 and sell it today you would earn a total of 165,400 from holding SoftBank Group Corp or generate 18.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 66.67% |
| Values | Daily Returns |
CAP LEASE AVIATION vs. SoftBank Group Corp
Performance |
| Timeline |
| CAP LEASE AVIATION |
| SoftBank Group Corp |
CAP LEASE and SoftBank Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAP LEASE and SoftBank Group
The main advantage of trading using opposite CAP LEASE and SoftBank Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAP LEASE 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.| CAP LEASE vs. Associated British Foods | CAP LEASE vs. Bankers Investment Trust | CAP LEASE vs. Commerzbank AG | CAP LEASE vs. Verizon Communications |
| SoftBank Group vs. European Metals Holdings | SoftBank Group vs. Empire Metals Limited | SoftBank Group vs. Adriatic Metals | SoftBank Group vs. Europa Metals |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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