Correlation Between Fast Retailing and FUTURE GAMING
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and FUTURE GAMING 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 FUTURE GAMING 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 FUTURE GAMING GRP, you can compare the effects of market volatilities on Fast Retailing and FUTURE GAMING 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 FUTURE GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and FUTURE GAMING.
Diversification Opportunities for Fast Retailing and FUTURE GAMING
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fast and FUTURE is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and FUTURE GAMING GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUTURE GAMING GRP 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 FUTURE GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUTURE GAMING GRP has no effect on the direction of Fast Retailing i.e., Fast Retailing and FUTURE GAMING go up and down completely randomly.
Pair Corralation between Fast Retailing and FUTURE GAMING
Assuming the 90 days trading horizon Fast Retailing Co is expected to generate 0.69 times more return on investment than FUTURE GAMING. However, Fast Retailing Co is 1.45 times less risky than FUTURE GAMING. It trades about 0.13 of its potential returns per unit of risk. FUTURE GAMING GRP is currently generating about 0.06 per unit of risk. If you would invest 30,150 in Fast Retailing Co on August 30, 2024 and sell it today you would earn a total of 1,640 from holding Fast Retailing Co or generate 5.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Fast Retailing Co vs. FUTURE GAMING GRP
Performance |
| Timeline |
| Fast Retailing |
| FUTURE GAMING GRP |
Fast Retailing and FUTURE GAMING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and FUTURE GAMING
The main advantage of trading using opposite Fast Retailing and FUTURE GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, FUTURE GAMING 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 FUTURE GAMING will offset losses from the drop in FUTURE GAMING's long position.| Fast Retailing vs. Apple Inc | Fast Retailing vs. Apple Inc | Fast Retailing vs. Superior Plus Corp | Fast Retailing vs. SIVERS SEMICONDUCTORS AB |
| FUTURE GAMING vs. URBAN OUTFITTERS | FUTURE GAMING vs. WillScot Mobile Mini | FUTURE GAMING vs. Singapore Telecommunications Limited | FUTURE GAMING vs. Sixt Leasing SE |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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