Correlation Between Fast Retailing and SHIN-ETSU CHEMICAL
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and SHIN-ETSU CHEMICAL 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 SHIN-ETSU CHEMICAL 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 SHIN ETSU CHEMICAL, you can compare the effects of market volatilities on Fast Retailing and SHIN-ETSU CHEMICAL 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 SHIN-ETSU CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and SHIN-ETSU CHEMICAL.
Diversification Opportunities for Fast Retailing and SHIN-ETSU CHEMICAL
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fast and SHIN-ETSU is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and SHIN ETSU CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHIN ETSU CHEMICAL 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 SHIN-ETSU CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHIN ETSU CHEMICAL has no effect on the direction of Fast Retailing i.e., Fast Retailing and SHIN-ETSU CHEMICAL go up and down completely randomly.
Pair Corralation between Fast Retailing and SHIN-ETSU CHEMICAL
Assuming the 90 days trading horizon Fast Retailing Co is expected to generate 1.01 times more return on investment than SHIN-ETSU CHEMICAL. However, Fast Retailing is 1.01 times more volatile than SHIN ETSU CHEMICAL. It trades about -0.12 of its potential returns per unit of risk. SHIN ETSU CHEMICAL is currently generating about -0.13 per unit of risk. If you would invest 32,209 in Fast Retailing Co on November 30, 2024 and sell it today you would lose (3,259) from holding Fast Retailing Co or give up 10.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fast Retailing Co vs. SHIN ETSU CHEMICAL
Performance |
| Timeline |
| Fast Retailing |
| SHIN ETSU CHEMICAL |
Fast Retailing and SHIN-ETSU CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and SHIN-ETSU CHEMICAL
The main advantage of trading using opposite Fast Retailing and SHIN-ETSU CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, SHIN-ETSU CHEMICAL 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 SHIN-ETSU CHEMICAL will offset losses from the drop in SHIN-ETSU CHEMICAL's long position.| Fast Retailing vs. EITZEN CHEMICALS | Fast Retailing vs. T Mobile | Fast Retailing vs. SOLSTAD OFFSHORE NK | Fast Retailing vs. SIEM OFFSHORE NEW |
| SHIN-ETSU CHEMICAL vs. Nufarm Limited | SHIN-ETSU CHEMICAL vs. Sterling Construction | SHIN-ETSU CHEMICAL vs. Agricultural Bank of | SHIN-ETSU CHEMICAL vs. AEGEAN AIRLINES |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |