Correlation Between De Grey and Fast Retailing
Can any of the company-specific risk be diversified away by investing in both De Grey 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 De Grey and Fast Retailing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between De Grey Mining and Fast Retailing Co, you can compare the effects of market volatilities on De Grey 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 De Grey with a short position of Fast Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and Fast Retailing.
Diversification Opportunities for De Grey and Fast Retailing
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DGD and Fast is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and Fast Retailing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Retailing and De Grey 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 De Grey Mining 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 De Grey i.e., De Grey and Fast Retailing go up and down completely randomly.
Pair Corralation between De Grey and Fast Retailing
Assuming the 90 days trading horizon De Grey Mining is expected to generate 1.09 times more return on investment than Fast Retailing. However, De Grey is 1.09 times more volatile than Fast Retailing Co. It trades about 0.27 of its potential returns per unit of risk. Fast Retailing Co is currently generating about -0.07 per unit of risk. If you would invest 108.00 in De Grey Mining on November 5, 2024 and sell it today you would earn a total of 12.00 from holding De Grey Mining or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
De Grey Mining vs. Fast Retailing Co
Performance |
| Timeline |
| De Grey Mining |
| Fast Retailing |
De Grey and Fast Retailing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Grey and Fast Retailing
The main advantage of trading using opposite De Grey and Fast Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey 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.| De Grey vs. INTER CARS SA | De Grey vs. Charter Communications | De Grey vs. Rocket Internet SE | De Grey vs. Geely Automobile Holdings |
| Fast Retailing vs. MTY Food Group | Fast Retailing vs. Performance Food Group | Fast Retailing vs. United Natural Foods | Fast Retailing vs. CarsalesCom |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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