Correlation Between SoftBank Group and Intuitive Investments

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

Diversification Opportunities for SoftBank Group and Intuitive Investments

-0.3

Correlation Coefficient

SoftBank Group  Intuitive Investments

Very good diversification

The 3 months correlation between SoftBank and Intuitive is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding SoftBank Group Corp and Intuitive Investments Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Investments 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 Intuitive Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Investments has no effect on the direction of SoftBank Group i.e., SoftBank Group and Intuitive Investments go up and down completely randomly.

Pair Corralation between SoftBank Group and Intuitive Investments

Assuming the 90 days trading horizon SoftBank Group Corp is expected to generate 1.55 times more return on investment than Intuitive Investments. However, SoftBank Group is 1.55 times more volatile than Intuitive Investments Group. It trades about 0.42 of its potential returns per unit of risk. Intuitive Investments Group is currently generating about 0.12 per unit of risk. If you would invest  741,500  in SoftBank Group Corp on March 31, 2025 and sell it today you would earn a total of  156,400  from holding SoftBank Group Corp or generate 21.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	23.81%
Values	Daily Returns

SoftBank Group Corp  vs.  Intuitive Investments Group

SoftBank Group Corp

Risk-Adjusted Performance

Solid

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 comparatively weak basic indicators, SoftBank Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Intuitive Investments

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intuitive Investments Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Intuitive Investments exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SoftBank Group and Intuitive Investments

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

The idea behind SoftBank Group Corp and Intuitive Investments Group 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.