Correlation Between Fast Retailing and MPH Health
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and MPH Health 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 MPH Health 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 MPH Health Care, you can compare the effects of market volatilities on Fast Retailing and MPH Health 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 MPH Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and MPH Health.
Diversification Opportunities for Fast Retailing and MPH Health
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fast and MPH is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and MPH Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPH Health Care 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 MPH Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPH Health Care has no effect on the direction of Fast Retailing i.e., Fast Retailing and MPH Health go up and down completely randomly.
Pair Corralation between Fast Retailing and MPH Health
Assuming the 90 days trading horizon Fast Retailing Co is expected to under-perform the MPH Health. In addition to that, Fast Retailing is 1.06 times more volatile than MPH Health Care. It trades about -0.01 of its total potential returns per unit of risk. MPH Health Care is currently generating about 0.02 per unit of volatility. If you would invest 2,320 in MPH Health Care on October 16, 2024 and sell it today you would earn a total of 20.00 from holding MPH Health Care or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fast Retailing Co vs. MPH Health Care
Performance |
| Timeline |
| Fast Retailing |
| MPH Health Care |
Fast Retailing and MPH Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and MPH Health
The main advantage of trading using opposite Fast Retailing and MPH Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, MPH Health 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 MPH Health will offset losses from the drop in MPH Health's long position.| Fast Retailing vs. NURAN WIRELESS INC | Fast Retailing vs. Tower One Wireless | Fast Retailing vs. Ryanair Holdings plc | Fast Retailing vs. Air New Zealand |
| MPH Health vs. Salesforce | MPH Health vs. Fast Retailing Co | MPH Health vs. LPKF Laser Electronics | MPH Health vs. Benchmark Electronics |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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