Correlation Between FEMALE HEALTH and FAST RETAIL
Can any of the company-specific risk be diversified away by investing in both FEMALE HEALTH 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 FEMALE HEALTH and FAST RETAIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FEMALE HEALTH and FAST RETAIL ADR, you can compare the effects of market volatilities on FEMALE HEALTH 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 FEMALE HEALTH with a short position of FAST RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of FEMALE HEALTH and FAST RETAIL.
Diversification Opportunities for FEMALE HEALTH and FAST RETAIL
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between FEMALE and FAST is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH i.e., FEMALE HEALTH and FAST RETAIL go up and down completely randomly.
Pair Corralation between FEMALE HEALTH and FAST RETAIL
Assuming the 90 days trading horizon FEMALE HEALTH is expected to under-perform the FAST RETAIL. In addition to that, FEMALE HEALTH is 2.39 times more volatile than FAST RETAIL ADR. It trades about -0.01 of its total potential returns per unit of risk. FAST RETAIL ADR is currently generating about 0.22 per unit of volatility. If you would invest 2,920 in FAST RETAIL ADR on September 4, 2024 and sell it today you would earn a total of 240.00 from holding FAST RETAIL ADR or generate 8.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
FEMALE HEALTH vs. FAST RETAIL ADR
Performance |
| Timeline |
| FEMALE HEALTH |
| FAST RETAIL ADR |
FEMALE HEALTH and FAST RETAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FEMALE HEALTH and FAST RETAIL
The main advantage of trading using opposite FEMALE HEALTH and FAST RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FEMALE HEALTH 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.| FEMALE HEALTH vs. TOTAL GABON | FEMALE HEALTH vs. Walgreens Boots Alliance | FEMALE HEALTH vs. Peak Resources Limited |
| FAST RETAIL vs. FAST RETAILCOSPHDR 1 | FAST RETAIL vs. Ross Stores | FAST RETAIL vs. Genesco | FAST RETAIL vs. Stitch Fix |
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 Stocks Directory module to find actively traded stocks across global markets.
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