Correlation Between Fast Retailing and Santacruz Silver
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and Santacruz Silver 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 Fast Retailing and Santacruz Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fast Retailing Co and Santacruz Silver Mining, you can compare the effects of market volatilities on Fast Retailing and Santacruz Silver 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 Fast Retailing with a short position of Santacruz Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and Santacruz Silver.
Diversification Opportunities for Fast Retailing and Santacruz Silver
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fast and Santacruz is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and Santacruz Silver Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santacruz Silver Mining and Fast Retailing 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 Fast Retailing Co are associated (or correlated) with Santacruz Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santacruz Silver Mining has no effect on the direction of Fast Retailing i.e., Fast Retailing and Santacruz Silver go up and down completely randomly.
Pair Corralation between Fast Retailing and Santacruz Silver
Assuming the 90 days trading horizon Fast Retailing Co is expected to under-perform the Santacruz Silver. But the stock apears to be less risky and, when comparing its historical volatility, Fast Retailing Co is 2.18 times less risky than Santacruz Silver. The stock trades about -0.14 of its potential returns per unit of risk. The Santacruz Silver Mining is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Santacruz Silver Mining on November 8, 2024 and sell it today you would earn a total of 8.00 from holding Santacruz Silver Mining or generate 44.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fast Retailing Co vs. Santacruz Silver Mining
Performance |
| Timeline |
| Fast Retailing |
| Santacruz Silver Mining |
Fast Retailing and Santacruz Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and Santacruz Silver
The main advantage of trading using opposite Fast Retailing and Santacruz Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, Santacruz Silver 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 Santacruz Silver will offset losses from the drop in Santacruz Silver's long position.| Fast Retailing vs. Apple Inc | Fast Retailing vs. Apple Inc | Fast Retailing vs. Apple Inc | Fast Retailing vs. Apple Inc |
| Santacruz Silver vs. Chuangs China Investments | Santacruz Silver vs. MGIC INVESTMENT | Santacruz Silver vs. FLOW TRADERS LTD | Santacruz Silver vs. HK Electric Investments |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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