Correlation Between Crown Castle and Fast Retailing
Can any of the company-specific risk be diversified away by investing in both Crown Castle 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 Crown Castle and Fast Retailing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crown Castle International and Fast Retailing Co, you can compare the effects of market volatilities on Crown Castle 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 Crown Castle with a short position of Fast Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Castle and Fast Retailing.
Diversification Opportunities for Crown Castle and Fast Retailing
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Crown and Fast is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Crown Castle International and Fast Retailing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Retailing and Crown Castle 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 Crown Castle International 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 Crown Castle i.e., Crown Castle and Fast Retailing go up and down completely randomly.
Pair Corralation between Crown Castle and Fast Retailing
Assuming the 90 days horizon Crown Castle International is expected to under-perform the Fast Retailing. But the stock apears to be less risky and, when comparing its historical volatility, Crown Castle International is 1.1 times less risky than Fast Retailing. The stock trades about -0.01 of its potential returns per unit of risk. The Fast Retailing Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 18,667 in Fast Retailing Co on September 12, 2024 and sell it today you would earn a total of 14,763 from holding Fast Retailing Co or generate 79.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crown Castle International vs. Fast Retailing Co
Performance |
| Timeline |
| Crown Castle Interna |
| Fast Retailing |
Crown Castle and Fast Retailing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crown Castle and Fast Retailing
The main advantage of trading using opposite Crown Castle and Fast Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Castle 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.| Crown Castle vs. Superior Plus Corp | Crown Castle vs. SIVERS SEMICONDUCTORS AB | Crown Castle vs. CHINA HUARONG ENERHD 50 | Crown Castle vs. NORDIC HALIBUT AS |
| Fast Retailing vs. Mitsubishi Materials | Fast Retailing vs. Martin Marietta Materials | Fast Retailing vs. Infrastrutture Wireless Italiane | Fast Retailing vs. The Yokohama Rubber |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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