Correlation Between SoftBank Group and Aptamer Group
Can any of the company-specific risk be diversified away by investing in both SoftBank Group and Aptamer 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 SoftBank Group and Aptamer Group 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 Aptamer Group PLC, you can compare the effects of market volatilities on SoftBank Group and Aptamer 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 SoftBank Group with a short position of Aptamer Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoftBank Group and Aptamer Group.
Diversification Opportunities for SoftBank Group and Aptamer Group
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SoftBank and Aptamer is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding SoftBank Group Corp and Aptamer Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptamer Group PLC 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 Aptamer Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptamer Group PLC has no effect on the direction of SoftBank Group i.e., SoftBank Group and Aptamer Group go up and down completely randomly.
Pair Corralation between SoftBank Group and Aptamer Group
Assuming the 90 days trading horizon SoftBank Group Corp is expected to under-perform the Aptamer Group. But the stock apears to be less risky and, when comparing its historical volatility, SoftBank Group Corp is 2.37 times less risky than Aptamer Group. The stock trades about -0.02 of its potential returns per unit of risk. The Aptamer Group PLC is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 32.00 in Aptamer Group PLC on September 24, 2024 and sell it today you would earn a total of 3.00 from holding Aptamer Group PLC or generate 9.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 66.67% |
Values | Daily Returns |
SoftBank Group Corp vs. Aptamer Group PLC
Performance |
Timeline |
SoftBank Group Corp |
Aptamer Group PLC |
SoftBank Group and Aptamer Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SoftBank Group and Aptamer Group
The main advantage of trading using opposite SoftBank Group and Aptamer Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoftBank Group position performs unexpectedly, Aptamer 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 Aptamer Group will offset losses from the drop in Aptamer Group's long position.SoftBank Group vs. Roebuck Food Group | SoftBank Group vs. Grand Vision Media | SoftBank Group vs. Everyman Media Group | SoftBank Group vs. Travel Leisure Co |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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