Correlation Between Fast Retailing and Gruppo Mutuionline
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and Gruppo Mutuionline 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 Gruppo Mutuionline 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 Gruppo Mutuionline SpA, you can compare the effects of market volatilities on Fast Retailing and Gruppo Mutuionline 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 Gruppo Mutuionline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and Gruppo Mutuionline.
Diversification Opportunities for Fast Retailing and Gruppo Mutuionline
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fast and Gruppo is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and Gruppo Mutuionline SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gruppo Mutuionline SpA 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 Gruppo Mutuionline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gruppo Mutuionline SpA has no effect on the direction of Fast Retailing i.e., Fast Retailing and Gruppo Mutuionline go up and down completely randomly.
Pair Corralation between Fast Retailing and Gruppo Mutuionline
Assuming the 90 days trading horizon Fast Retailing Co is expected to generate 0.92 times more return on investment than Gruppo Mutuionline. However, Fast Retailing Co is 1.09 times less risky than Gruppo Mutuionline. It trades about 0.06 of its potential returns per unit of risk. Gruppo Mutuionline SpA is currently generating about 0.03 per unit of risk. If you would invest 22,400 in Fast Retailing Co on August 31, 2024 and sell it today you would earn a total of 9,430 from holding Fast Retailing Co or generate 42.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fast Retailing Co vs. Gruppo Mutuionline SpA
Performance |
| Timeline |
| Fast Retailing |
| Gruppo Mutuionline SpA |
Fast Retailing and Gruppo Mutuionline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and Gruppo Mutuionline
The main advantage of trading using opposite Fast Retailing and Gruppo Mutuionline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, Gruppo Mutuionline 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 Gruppo Mutuionline will offset losses from the drop in Gruppo Mutuionline's long position.| Fast Retailing vs. CHEMICAL INDUSTRIES | Fast Retailing vs. Sumitomo Chemical | Fast Retailing vs. Siamgas And Petrochemicals | Fast Retailing vs. China BlueChemical |
| Gruppo Mutuionline vs. Apple Inc | Gruppo Mutuionline vs. Apple Inc | Gruppo Mutuionline vs. Apple Inc | Gruppo Mutuionline vs. Apple Inc |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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