Correlation Between Fast Retailing and CHINA TELECOM
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and CHINA TELECOM 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 CHINA TELECOM 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 CHINA TELECOM H , you can compare the effects of market volatilities on Fast Retailing and CHINA TELECOM 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 CHINA TELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and CHINA TELECOM.
Diversification Opportunities for Fast Retailing and CHINA TELECOM
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fast and CHINA is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and CHINA TELECOM H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA TELECOM H 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 CHINA TELECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA TELECOM H has no effect on the direction of Fast Retailing i.e., Fast Retailing and CHINA TELECOM go up and down completely randomly.
Pair Corralation between Fast Retailing and CHINA TELECOM
If you would invest 29,000 in Fast Retailing Co on September 13, 2024 and sell it today you would earn a total of 4,620 from holding Fast Retailing Co or generate 15.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fast Retailing Co vs. CHINA TELECOM H
Performance |
| Timeline |
| Fast Retailing |
| CHINA TELECOM H |
Fast Retailing and CHINA TELECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and CHINA TELECOM
The main advantage of trading using opposite Fast Retailing and CHINA TELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, CHINA TELECOM 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 CHINA TELECOM will offset losses from the drop in CHINA TELECOM's long position.| Fast Retailing vs. Apple Inc | Fast Retailing vs. Apple Inc | Fast Retailing vs. Apple Inc | Fast Retailing vs. Apple Inc |
| CHINA TELECOM vs. Apple Inc | CHINA TELECOM vs. Apple Inc | CHINA TELECOM vs. Apple Inc | CHINA TELECOM 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |