Correlation Between Fast Retailing and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and Samsung Electronics 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 Samsung Electronics 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 Samsung Electronics Co, you can compare the effects of market volatilities on Fast Retailing and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and Samsung Electronics.
Diversification Opportunities for Fast Retailing and Samsung Electronics
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fast and Samsung is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Fast Retailing i.e., Fast Retailing and Samsung Electronics go up and down completely randomly.
Pair Corralation between Fast Retailing and Samsung Electronics
Assuming the 90 days trading horizon Fast Retailing Co is expected to generate 0.61 times more return on investment than Samsung Electronics. However, Fast Retailing Co is 1.64 times less risky than Samsung Electronics. It trades about 0.24 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.07 per unit of risk. If you would invest 29,020 in Fast Retailing Co on September 2, 2024 and sell it today you would earn a total of 2,810 from holding Fast Retailing Co or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fast Retailing Co vs. Samsung Electronics Co
Performance |
| Timeline |
| Fast Retailing |
| Samsung Electronics |
Fast Retailing and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and Samsung Electronics
The main advantage of trading using opposite Fast Retailing and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Fast Retailing vs. SIVERS SEMICONDUCTORS AB | Fast Retailing vs. Darden Restaurants | Fast Retailing vs. Reliance Steel Aluminum | Fast Retailing vs. Q2M Managementberatung AG |
| Samsung Electronics vs. PKSHA TECHNOLOGY INC | Samsung Electronics vs. GAMESTOP | Samsung Electronics vs. Zoom Video Communications | Samsung Electronics vs. TSOGO SUN GAMING |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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