Correlation Between Lion One and SOFTBANK CORP
Can any of the company-specific risk be diversified away by investing in both Lion One and SOFTBANK CORP 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 Lion One and SOFTBANK CORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and SOFTBANK P ADR, you can compare the effects of market volatilities on Lion One and SOFTBANK CORP 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 Lion One with a short position of SOFTBANK CORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and SOFTBANK CORP.
Diversification Opportunities for Lion One and SOFTBANK CORP
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lion and SOFTBANK is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and SOFTBANK P ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOFTBANK P ADR and Lion One 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 Lion One Metals are associated (or correlated) with SOFTBANK CORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOFTBANK P ADR has no effect on the direction of Lion One i.e., Lion One and SOFTBANK CORP go up and down completely randomly.
Pair Corralation between Lion One and SOFTBANK CORP
Assuming the 90 days horizon Lion One Metals is expected to under-perform the SOFTBANK CORP. But the stock apears to be less risky and, when comparing its historical volatility, Lion One Metals is 1.24 times less risky than SOFTBANK CORP. The stock trades about -0.05 of its potential returns per unit of risk. The SOFTBANK P ADR is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,050 in SOFTBANK P ADR on September 4, 2024 and sell it today you would earn a total of 80.00 from holding SOFTBANK P ADR or generate 7.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lion One Metals vs. SOFTBANK P ADR
Performance |
| Timeline |
| Lion One Metals |
| SOFTBANK P ADR |
Lion One and SOFTBANK CORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and SOFTBANK CORP
The main advantage of trading using opposite Lion One and SOFTBANK CORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, SOFTBANK CORP 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 CORP will offset losses from the drop in SOFTBANK CORP's long position.| Lion One vs. HEALTHCARE REAL A | Lion One vs. Goosehead Insurance | Lion One vs. INSURANCE AUST GRP | Lion One vs. SBI Insurance Group |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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