Correlation Between U S Cellular and SoftBank Group
Can any of the company-specific risk be diversified away by investing in both U S Cellular 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 U S Cellular and SoftBank Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Cellular and SoftBank Group Corp, you can compare the effects of market volatilities on U S Cellular 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 U S Cellular with a short position of SoftBank Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of U S Cellular and SoftBank Group.
Diversification Opportunities for U S Cellular and SoftBank Group
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between USM and SoftBank is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding United States Cellular 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 U S Cellular 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 United States Cellular 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 U S Cellular i.e., U S Cellular and SoftBank Group go up and down completely randomly.
Pair Corralation between U S Cellular and SoftBank Group
Considering the 90-day investment horizon United States Cellular is expected to generate 1.62 times more return on investment than SoftBank Group. However, U S Cellular is 1.62 times more volatile than SoftBank Group Corp. It trades about 0.06 of its potential returns per unit of risk. SoftBank Group Corp is currently generating about 0.01 per unit of risk. If you would invest 6,170 in United States Cellular on September 1, 2024 and sell it today you would earn a total of 176.00 from holding United States Cellular or generate 2.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Cellular vs. SoftBank Group Corp
Performance |
| Timeline |
| United States Cellular |
| SoftBank Group Corp |
U S Cellular and SoftBank Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U S Cellular and SoftBank Group
The main advantage of trading using opposite U S Cellular and SoftBank Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U S Cellular 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.| U S Cellular vs. Telephone and Data | U S Cellular vs. Vodafone Group PLC | U S Cellular vs. Lumen Technologies | U S Cellular vs. Altice USA |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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