Correlation Between Fast Retailing and MYFAIR GOLD
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and MYFAIR GOLD 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 MYFAIR GOLD 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 MYFAIR GOLD P, you can compare the effects of market volatilities on Fast Retailing and MYFAIR GOLD 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 MYFAIR GOLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and MYFAIR GOLD.
Diversification Opportunities for Fast Retailing and MYFAIR GOLD
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fast and MYFAIR is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and MYFAIR GOLD P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYFAIR GOLD P 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 MYFAIR GOLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYFAIR GOLD P has no effect on the direction of Fast Retailing i.e., Fast Retailing and MYFAIR GOLD go up and down completely randomly.
Pair Corralation between Fast Retailing and MYFAIR GOLD
Assuming the 90 days trading horizon Fast Retailing Co is expected to generate 0.66 times more return on investment than MYFAIR GOLD. However, Fast Retailing Co is 1.51 times less risky than MYFAIR GOLD. It trades about 0.09 of its potential returns per unit of risk. MYFAIR GOLD P is currently generating about 0.01 per unit of risk. If you would invest 23,990 in Fast Retailing Co on October 18, 2024 and sell it today you would earn a total of 5,630 from holding Fast Retailing Co or generate 23.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Fast Retailing Co vs. MYFAIR GOLD P
Performance |
| Timeline |
| Fast Retailing |
| MYFAIR GOLD P |
Fast Retailing and MYFAIR GOLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and MYFAIR GOLD
The main advantage of trading using opposite Fast Retailing and MYFAIR GOLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, MYFAIR GOLD 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 MYFAIR GOLD will offset losses from the drop in MYFAIR GOLD's long position.| Fast Retailing vs. GLOBUS MEDICAL A | Fast Retailing vs. Chengdu PUTIAN Telecommunications | Fast Retailing vs. GEELY AUTOMOBILE | Fast Retailing vs. PEPTONIC MEDICAL |
| MYFAIR GOLD vs. MTY Food Group | MYFAIR GOLD vs. INDOFOOD AGRI RES | MYFAIR GOLD vs. Fast Retailing Co | MYFAIR GOLD vs. CANON MARKETING JP |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |