Correlation Between SoftBank Group and Workspace Group

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

Diversification Opportunities for SoftBank Group and Workspace Group

-0.24

Correlation Coefficient

SoftBank Group  Workspace Group

Very good diversification

The 3 months correlation between SoftBank and Workspace is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding SoftBank Group Corp and Workspace Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workspace 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 Workspace Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workspace Group PLC has no effect on the direction of SoftBank Group i.e., SoftBank Group and Workspace Group go up and down completely randomly.

Pair Corralation between SoftBank Group and Workspace Group

Assuming the 90 days trading horizon SoftBank Group Corp is expected to generate 2.04 times more return on investment than Workspace Group. However, SoftBank Group is 2.04 times more volatile than Workspace Group PLC. It trades about -0.03 of its potential returns per unit of risk. Workspace Group PLC is currently generating about -0.22 per unit of risk. If you would invest  899,200  in SoftBank Group Corp on December 4, 2024 and sell it today you would lose (66,200) from holding SoftBank Group Corp or give up 7.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	67.21%
Values	Daily Returns

SoftBank Group Corp  vs.  Workspace Group PLC

SoftBank Group Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days SoftBank Group Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Workspace Group PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Workspace Group PLC 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 April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with SoftBank Group and Workspace Group

The main advantage of trading using opposite SoftBank Group and Workspace Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoftBank Group position performs unexpectedly, Workspace 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 Workspace Group will offset losses from the drop in Workspace Group's long position.

The idea behind SoftBank Group Corp and Workspace Group PLC 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.