Correlation Between Fast Retailing and KOOL2PLAY
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and KOOL2PLAY 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 KOOL2PLAY 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 KOOL2PLAY SA ZY, you can compare the effects of market volatilities on Fast Retailing and KOOL2PLAY 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 KOOL2PLAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and KOOL2PLAY.
Diversification Opportunities for Fast Retailing and KOOL2PLAY
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fast and KOOL2PLAY is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and KOOL2PLAY SA ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOOL2PLAY SA ZY 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 KOOL2PLAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOOL2PLAY SA ZY has no effect on the direction of Fast Retailing i.e., Fast Retailing and KOOL2PLAY go up and down completely randomly.
Pair Corralation between Fast Retailing and KOOL2PLAY
Assuming the 90 days trading horizon Fast Retailing Co is expected to generate 0.28 times more return on investment than KOOL2PLAY. However, Fast Retailing Co is 3.61 times less risky than KOOL2PLAY. It trades about 0.07 of its potential returns per unit of risk. KOOL2PLAY SA ZY is currently generating about -0.02 per unit of risk. If you would invest 18,500 in Fast Retailing Co on September 19, 2024 and sell it today you would earn a total of 13,730 from holding Fast Retailing Co or generate 74.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Fast Retailing Co vs. KOOL2PLAY SA ZY
Performance |
| Timeline |
| Fast Retailing |
| KOOL2PLAY SA ZY |
Fast Retailing and KOOL2PLAY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and KOOL2PLAY
The main advantage of trading using opposite Fast Retailing and KOOL2PLAY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, KOOL2PLAY 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 KOOL2PLAY will offset losses from the drop in KOOL2PLAY's long position.| Fast Retailing vs. EMBARK EDUCATION LTD | Fast Retailing vs. STRAYER EDUCATION | Fast Retailing vs. SEI INVESTMENTS | Fast Retailing vs. Apollo Investment Corp |
| KOOL2PLAY vs. Siamgas And Petrochemicals | KOOL2PLAY vs. CarsalesCom | KOOL2PLAY vs. KINGBOARD CHEMICAL | KOOL2PLAY vs. Sanyo Chemical Industries |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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