Correlation Between Wenzhou Kangning and Fast Retailing
Can any of the company-specific risk be diversified away by investing in both Wenzhou Kangning and Fast Retailing 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 Wenzhou Kangning and Fast Retailing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wenzhou Kangning Hospital and Fast Retailing Co, you can compare the effects of market volatilities on Wenzhou Kangning and Fast Retailing 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 Wenzhou Kangning with a short position of Fast Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wenzhou Kangning and Fast Retailing.
Diversification Opportunities for Wenzhou Kangning and Fast Retailing
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Wenzhou and Fast is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Wenzhou Kangning Hospital and Fast Retailing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Retailing and Wenzhou Kangning 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 Wenzhou Kangning Hospital are associated (or correlated) with Fast Retailing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Retailing has no effect on the direction of Wenzhou Kangning i.e., Wenzhou Kangning and Fast Retailing go up and down completely randomly.
Pair Corralation between Wenzhou Kangning and Fast Retailing
Assuming the 90 days trading horizon Wenzhou Kangning Hospital is expected to generate 1.64 times more return on investment than Fast Retailing. However, Wenzhou Kangning is 1.64 times more volatile than Fast Retailing Co. It trades about 0.05 of its potential returns per unit of risk. Fast Retailing Co is currently generating about 0.07 per unit of risk. If you would invest 83.00 in Wenzhou Kangning Hospital on October 11, 2024 and sell it today you would earn a total of 59.00 from holding Wenzhou Kangning Hospital or generate 71.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wenzhou Kangning Hospital vs. Fast Retailing Co
Performance |
| Timeline |
| Wenzhou Kangning Hospital |
| Fast Retailing |
Wenzhou Kangning and Fast Retailing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wenzhou Kangning and Fast Retailing
The main advantage of trading using opposite Wenzhou Kangning and Fast Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wenzhou Kangning position performs unexpectedly, Fast Retailing 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 Fast Retailing will offset losses from the drop in Fast Retailing's long position.| Wenzhou Kangning vs. Nomad Foods | Wenzhou Kangning vs. MTY Food Group | Wenzhou Kangning vs. Ebro Foods SA | Wenzhou Kangning vs. United Natural Foods |
| Fast Retailing vs. Cardinal Health | Fast Retailing vs. AIR PRODCHEMICALS | Fast Retailing vs. Wenzhou Kangning Hospital | Fast Retailing vs. INSURANCE AUST GRP |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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