Correlation Between Austral Gold and Fast Retailing
Can any of the company-specific risk be diversified away by investing in both Austral 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 Austral 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 Austral Gold Limited and Fast Retailing Co, you can compare the effects of market volatilities on Austral 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 Austral Gold with a short position of Fast Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austral Gold and Fast Retailing.
Diversification Opportunities for Austral Gold and Fast Retailing
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Austral and Fast is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Austral Gold Limited and Fast Retailing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Retailing and Austral 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 Austral Gold Limited 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 Austral Gold i.e., Austral Gold and Fast Retailing go up and down completely randomly.
Pair Corralation between Austral Gold and Fast Retailing
Assuming the 90 days horizon Austral Gold Limited is expected to generate 2.25 times more return on investment than Fast Retailing. However, Austral Gold is 2.25 times more volatile than Fast Retailing Co. It trades about 0.09 of its potential returns per unit of risk. Fast Retailing Co is currently generating about 0.05 per unit of risk. If you would invest 3.12 in Austral Gold Limited on September 28, 2024 and sell it today you would lose (1.16) from holding Austral Gold Limited or give up 37.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 75.65% |
| Values | Daily Returns |
Austral Gold Limited vs. Fast Retailing Co
Performance |
| Timeline |
| Austral Gold Limited |
| Fast Retailing |
Austral Gold and Fast Retailing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austral Gold and Fast Retailing
The main advantage of trading using opposite Austral Gold and Fast Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austral 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.| Austral Gold vs. Compania de Minas | Austral Gold vs. Triple Flag Precious | Austral Gold vs. Zimplats Holdings Limited |
| Fast Retailing vs. Aritzia | Fast Retailing vs. Boot Barn Holdings | Fast Retailing vs. Guess Inc | Fast Retailing vs. The TJX Companies |
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.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |