Correlation Between SoftBank Group and Ocean Harvest

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Can any of the company-specific risk be diversified away by investing in both SoftBank Group and Ocean Harvest 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 Ocean Harvest 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 Ocean Harvest Technology, you can compare the effects of market volatilities on SoftBank Group and Ocean Harvest 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 Ocean Harvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoftBank Group and Ocean Harvest.

Diversification Opportunities for SoftBank Group and Ocean Harvest

SoftBankOceanDiversified AwaySoftBankOceanDiversified Away100%
-0.69
  Correlation Coefficient

Excellent diversification

The 3 months correlation between SoftBank and Ocean is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding SoftBank Group Corp and Ocean Harvest Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Harvest Technology 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 Ocean Harvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Harvest Technology has no effect on the direction of SoftBank Group i.e., SoftBank Group and Ocean Harvest go up and down completely randomly.

Pair Corralation between SoftBank Group and Ocean Harvest

Assuming the 90 days trading horizon SoftBank Group Corp is expected to generate 1.27 times more return on investment than Ocean Harvest. However, SoftBank Group is 1.27 times more volatile than Ocean Harvest Technology. It trades about 0.13 of its potential returns per unit of risk. Ocean Harvest Technology is currently generating about -0.16 per unit of risk. If you would invest  814,779  in SoftBank Group Corp on September 14, 2024 and sell it today you would earn a total of  106,521  from holding SoftBank Group Corp or generate 13.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy65.63%
ValuesDaily Returns

SoftBank Group Corp  vs.  Ocean Harvest Technology

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -20-15-10-50
JavaScript chart by amCharts 3.21.150R15 OHT
       Timeline  
SoftBank Group Corp 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in SoftBank Group Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, SoftBank Group unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15SepOctNovDecOctNovDec8,0008,5009,0009,500
Ocean Harvest Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ocean Harvest Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec88.599.51010.5

SoftBank Group and Ocean Harvest Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-11.47-8.59-5.71-2.83-0.0482.815.718.6111.5114.42 0.020.040.060.080.10
JavaScript chart by amCharts 3.21.150R15 OHT
       Returns  

Pair Trading with SoftBank Group and Ocean Harvest

The main advantage of trading using opposite SoftBank Group and Ocean Harvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoftBank Group position performs unexpectedly, Ocean Harvest 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 Ocean Harvest will offset losses from the drop in Ocean Harvest's long position.
The idea behind SoftBank Group Corp and Ocean Harvest Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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