Correlation Between PARKEN Sport and FAST RETAIL
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport 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 PARKEN Sport and FAST RETAIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PARKEN Sport Entertainment and FAST RETAIL ADR, you can compare the effects of market volatilities on PARKEN Sport 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 PARKEN Sport with a short position of FAST RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and FAST RETAIL.
Diversification Opportunities for PARKEN Sport and FAST RETAIL
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PARKEN and FAST is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment 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 PARKEN Sport 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 PARKEN Sport Entertainment 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 PARKEN Sport i.e., PARKEN Sport and FAST RETAIL go up and down completely randomly.
Pair Corralation between PARKEN Sport and FAST RETAIL
Assuming the 90 days horizon PARKEN Sport Entertainment is expected to under-perform the FAST RETAIL. But the stock apears to be less risky and, when comparing its historical volatility, PARKEN Sport Entertainment is 1.26 times less risky than FAST RETAIL. The stock trades about -0.01 of its potential returns per unit of risk. The FAST RETAIL ADR is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,980 in FAST RETAIL ADR on September 1, 2024 and sell it today you would earn a total of 180.00 from holding FAST RETAIL ADR or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PARKEN Sport Entertainment vs. FAST RETAIL ADR
Performance |
| Timeline |
| PARKEN Sport Enterta |
| FAST RETAIL ADR |
PARKEN Sport and FAST RETAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and FAST RETAIL
The main advantage of trading using opposite PARKEN Sport and FAST RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport 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.| PARKEN Sport vs. Netflix | PARKEN Sport vs. Warner Music Group | PARKEN Sport vs. Superior Plus Corp | PARKEN Sport vs. NMI Holdings |
| FAST RETAIL vs. AOYAMA TRADING | FAST RETAIL vs. Global Fashion Group | FAST RETAIL vs. Superior Plus Corp | FAST RETAIL vs. NMI Holdings |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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