Correlation Between Softbank Group and KT
Can any of the company-specific risk be diversified away by investing in both Softbank Group and KT 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 Softbank Group and KT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Softbank Group Corp and KT Corporation, you can compare the effects of market volatilities on Softbank Group and KT 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 Softbank Group with a short position of KT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Softbank Group and KT.
Diversification Opportunities for Softbank Group and KT
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Softbank and KT is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Softbank Group Corp and KT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Corporation and Softbank Group 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 Softbank Group Corp are associated (or correlated) with KT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Corporation has no effect on the direction of Softbank Group i.e., Softbank Group and KT go up and down completely randomly.
Pair Corralation between Softbank Group and KT
Assuming the 90 days horizon Softbank Group is expected to generate 1.48 times less return on investment than KT. In addition to that, Softbank Group is 2.0 times more volatile than KT Corporation. It trades about 0.03 of its total potential returns per unit of risk. KT Corporation is currently generating about 0.1 per unit of volatility. If you would invest 1,027 in KT Corporation on August 28, 2024 and sell it today you would earn a total of 669.00 from holding KT Corporation or generate 65.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Softbank Group Corp vs. KT Corp.
Performance |
| Timeline |
| Softbank Group Corp |
| KT Corporation |
Softbank Group and KT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Softbank Group and KT
The main advantage of trading using opposite Softbank Group and KT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Softbank Group position performs unexpectedly, KT 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 KT will offset losses from the drop in KT's long position.| Softbank Group vs. Vodafone Group PLC | Softbank Group vs. KDDI Corp | Softbank Group vs. Amrica Mvil, SAB | Softbank Group vs. ATT Inc |
| KT vs. Liberty Broadband Srs | KT vs. Ribbon Communications | KT vs. Liberty Broadband Srs | KT vs. Shenandoah Telecommunications 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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