Correlation Between PLATO GOLD and Fast Retailing
Can any of the company-specific risk be diversified away by investing in both PLATO GOLD 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 PLATO GOLD and Fast Retailing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLATO GOLD P and Fast Retailing Co, you can compare the effects of market volatilities on PLATO GOLD 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 PLATO GOLD with a short position of Fast Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLATO GOLD and Fast Retailing.
Diversification Opportunities for PLATO GOLD and Fast Retailing
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PLATO and Fast is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding PLATO GOLD P and Fast Retailing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Retailing and PLATO GOLD 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 PLATO GOLD P 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 PLATO GOLD i.e., PLATO GOLD and Fast Retailing go up and down completely randomly.
Pair Corralation between PLATO GOLD and Fast Retailing
Assuming the 90 days horizon PLATO GOLD P is expected to generate 28.08 times more return on investment than Fast Retailing. However, PLATO GOLD is 28.08 times more volatile than Fast Retailing Co. It trades about 0.11 of its potential returns per unit of risk. Fast Retailing Co is currently generating about 0.08 per unit of risk. If you would invest 0.70 in PLATO GOLD P on September 12, 2024 and sell it today you would earn a total of 0.30 from holding PLATO GOLD P or generate 42.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLATO GOLD P vs. Fast Retailing Co
Performance |
| Timeline |
| PLATO GOLD P |
| Fast Retailing |
PLATO GOLD and Fast Retailing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLATO GOLD and Fast Retailing
The main advantage of trading using opposite PLATO GOLD and Fast Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLATO GOLD 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.| PLATO GOLD vs. Elmos Semiconductor SE | PLATO GOLD vs. ELMOS SEMICONDUCTOR | PLATO GOLD vs. National Beverage Corp | PLATO GOLD vs. CAL MAINE FOODS |
| Fast Retailing vs. The TJX Companies | Fast Retailing vs. The Gap | Fast Retailing vs. Superior Plus Corp | Fast Retailing vs. SIVERS SEMICONDUCTORS AB |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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