Correlation Between National Retail and FAST RETAIL
Can any of the company-specific risk be diversified away by investing in both National Retail and FAST RETAIL 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 National Retail and FAST RETAIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Retail Properties and FAST RETAIL ADR, you can compare the effects of market volatilities on National Retail and FAST RETAIL 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 National Retail with a short position of FAST RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Retail and FAST RETAIL.
Diversification Opportunities for National Retail and FAST RETAIL
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between National and FAST is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding National Retail Properties and FAST RETAIL ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAST RETAIL ADR and National Retail 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 National Retail Properties are associated (or correlated) with FAST RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAST RETAIL ADR has no effect on the direction of National Retail i.e., National Retail and FAST RETAIL go up and down completely randomly.
Pair Corralation between National Retail and FAST RETAIL
Assuming the 90 days trading horizon National Retail is expected to generate 3.45 times less return on investment than FAST RETAIL. In addition to that, National Retail is 1.15 times more volatile than FAST RETAIL ADR. It trades about 0.03 of its total potential returns per unit of risk. FAST RETAIL ADR is currently generating about 0.1 per unit of volatility. If you would invest 3,020 in FAST RETAIL ADR on August 31, 2024 and sell it today you would earn a total of 120.00 from holding FAST RETAIL ADR or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Retail Properties vs. FAST RETAIL ADR
Performance |
| Timeline |
| National Retail Prop |
| FAST RETAIL ADR |
National Retail and FAST RETAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Retail and FAST RETAIL
The main advantage of trading using opposite National Retail and FAST RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Retail position performs unexpectedly, FAST RETAIL 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 RETAIL will offset losses from the drop in FAST RETAIL's long position.| National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc |
| FAST RETAIL vs. SEKISUI CHEMICAL | FAST RETAIL vs. GRIFFIN MINING LTD | FAST RETAIL vs. Shin Etsu Chemical Co | FAST RETAIL vs. Jacquet Metal Service |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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