Correlation Between SoftBank Group and LBG Media
Can any of the company-specific risk be diversified away by investing in both SoftBank Group and LBG Media 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 LBG Media 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 LBG Media PLC, you can compare the effects of market volatilities on SoftBank Group and LBG Media 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 LBG Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoftBank Group and LBG Media.
Diversification Opportunities for SoftBank Group and LBG Media
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SoftBank and LBG is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding SoftBank Group Corp and LBG Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LBG Media 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 LBG Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LBG Media PLC has no effect on the direction of SoftBank Group i.e., SoftBank Group and LBG Media go up and down completely randomly.
Pair Corralation between SoftBank Group and LBG Media
Assuming the 90 days trading horizon SoftBank Group Corp is expected to generate 1.41 times more return on investment than LBG Media. However, SoftBank Group is 1.41 times more volatile than LBG Media PLC. It trades about 0.12 of its potential returns per unit of risk. LBG Media PLC is currently generating about 0.02 per unit of risk. If you would invest 618,350 in SoftBank Group Corp on August 15, 2025 and sell it today you would earn a total of 1,541,650 from holding SoftBank Group Corp or generate 249.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 63.25% |
| Values | Daily Returns |
SoftBank Group Corp vs. LBG Media PLC
Performance |
| Timeline |
| SoftBank Group Corp |
| LBG Media PLC |
SoftBank Group and LBG Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoftBank Group and LBG Media
The main advantage of trading using opposite SoftBank Group and LBG Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoftBank Group position performs unexpectedly, LBG Media 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 LBG Media will offset losses from the drop in LBG Media's long position.| SoftBank Group vs. Flow Traders NV | SoftBank Group vs. Veolia Environnement VE | SoftBank Group vs. Air Products Chemicals | SoftBank Group vs. Tata Steel Limited |
| LBG Media vs. SANTANDER UK 10 | LBG Media vs. Coor Service Management | LBG Media vs. Franklin FTSE Brazil | LBG Media vs. Surgical Science Sweden |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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