Correlation Between Fast Retailing and FAST RETAIL
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and FAST RETAIL 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 FAST RETAIL 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 FAST RETAIL ADR, you can compare the effects of market volatilities on Fast Retailing and FAST RETAIL 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 FAST RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and FAST RETAIL.
Diversification Opportunities for Fast Retailing and FAST RETAIL
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fast and FAST is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and FAST RETAIL ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAST RETAIL ADR 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 FAST RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAST RETAIL ADR has no effect on the direction of Fast Retailing i.e., Fast Retailing and FAST RETAIL go up and down completely randomly.
Pair Corralation between Fast Retailing and FAST RETAIL
Assuming the 90 days trading horizon Fast Retailing Co is expected to generate 1.0 times more return on investment than FAST RETAIL. However, Fast Retailing Co is 1.01 times less risky than FAST RETAIL. It trades about 0.03 of its potential returns per unit of risk. FAST RETAIL ADR is currently generating about 0.01 per unit of risk. If you would invest 29,560 in Fast Retailing Co on August 25, 2024 and sell it today you would earn a total of 420.00 from holding Fast Retailing Co or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fast Retailing Co vs. FAST RETAIL ADR
Performance |
| Timeline |
| Fast Retailing |
| FAST RETAIL ADR |
Fast Retailing and FAST RETAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and FAST RETAIL
The main advantage of trading using opposite Fast Retailing and FAST RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, FAST RETAIL 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 FAST RETAIL will offset losses from the drop in FAST RETAIL's long position.| Fast Retailing vs. Autohome ADR | Fast Retailing vs. KB HOME | Fast Retailing vs. Sqs Software Quality | Fast Retailing vs. Alfa Financial Software |
| FAST RETAIL vs. AOYAMA TRADING | FAST RETAIL vs. J JILL INC | FAST RETAIL vs. Superior Plus Corp | FAST RETAIL vs. NMI Holdings |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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