Correlation Between Cumulus Media and Fast Retailing
Can any of the company-specific risk be diversified away by investing in both Cumulus Media 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 Cumulus Media and Fast Retailing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cumulus Media Class and Fast Retailing Co, you can compare the effects of market volatilities on Cumulus Media 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 Cumulus Media with a short position of Fast Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cumulus Media and Fast Retailing.
Diversification Opportunities for Cumulus Media and Fast Retailing
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cumulus and Fast is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Cumulus Media Class and Fast Retailing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Retailing and Cumulus Media 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 Cumulus Media Class 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 Cumulus Media i.e., Cumulus Media and Fast Retailing go up and down completely randomly.
Pair Corralation between Cumulus Media and Fast Retailing
Given the investment horizon of 90 days Cumulus Media Class is expected to under-perform the Fast Retailing. In addition to that, Cumulus Media is 4.12 times more volatile than Fast Retailing Co. It trades about -0.15 of its total potential returns per unit of risk. Fast Retailing Co is currently generating about -0.11 per unit of volatility. If you would invest 33,100 in Fast Retailing Co on September 2, 2024 and sell it today you would lose (1,035) from holding Fast Retailing Co or give up 3.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cumulus Media Class vs. Fast Retailing Co
Performance |
| Timeline |
| Cumulus Media Class |
| Fast Retailing |
Cumulus Media and Fast Retailing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cumulus Media and Fast Retailing
The main advantage of trading using opposite Cumulus Media and Fast Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cumulus Media 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.| Cumulus Media vs. E W Scripps | Cumulus Media vs. Gray Television | Cumulus Media vs. ProSiebenSat1 Media AG | Cumulus Media vs. RTL Group SA |
| Fast Retailing vs. Industria de Diseno | Fast Retailing vs. Shoe Carnival | Fast Retailing vs. Genesco | Fast Retailing vs. Ross Stores |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |