Correlation Between Fast Retailing and POLAR POWER
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and POLAR POWER 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 POLAR POWER 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 POLAR POWER INC, you can compare the effects of market volatilities on Fast Retailing and POLAR POWER 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 POLAR POWER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and POLAR POWER.
Diversification Opportunities for Fast Retailing and POLAR POWER
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fast and POLAR is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and POLAR POWER INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POLAR POWER INC 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 POLAR POWER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POLAR POWER INC has no effect on the direction of Fast Retailing i.e., Fast Retailing and POLAR POWER go up and down completely randomly.
Pair Corralation between Fast Retailing and POLAR POWER
If you would invest 31,200 in Fast Retailing Co on September 24, 2024 and sell it today you would earn a total of 940.00 from holding Fast Retailing Co or generate 3.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Fast Retailing Co vs. POLAR POWER INC
Performance |
| Timeline |
| Fast Retailing |
| POLAR POWER INC |
Fast Retailing and POLAR POWER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and POLAR POWER
The main advantage of trading using opposite Fast Retailing and POLAR POWER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, POLAR POWER 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 POLAR POWER will offset losses from the drop in POLAR POWER's long position.| Fast Retailing vs. VIENNA INSURANCE GR | Fast Retailing vs. Selective Insurance Group | Fast Retailing vs. Insurance Australia Group | Fast Retailing vs. Reinsurance Group of |
| POLAR POWER vs. Fast Retailing Co | POLAR POWER vs. Chunghwa Telecom Co | POLAR POWER vs. FLOW TRADERS LTD | POLAR POWER vs. CITIC Telecom International |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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