Correlation Between Fast Retailing and ALIOR BANK
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and ALIOR BANK 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 ALIOR BANK 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 ALIOR BANK, you can compare the effects of market volatilities on Fast Retailing and ALIOR BANK 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 ALIOR BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and ALIOR BANK.
Diversification Opportunities for Fast Retailing and ALIOR BANK
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fast and ALIOR is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and ALIOR BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALIOR BANK 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 ALIOR BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALIOR BANK has no effect on the direction of Fast Retailing i.e., Fast Retailing and ALIOR BANK go up and down completely randomly.
Pair Corralation between Fast Retailing and ALIOR BANK
Assuming the 90 days horizon Fast Retailing Co is expected to generate 1.0 times more return on investment than ALIOR BANK. However, Fast Retailing Co is 1.0 times less risky than ALIOR BANK. It trades about 0.32 of its potential returns per unit of risk. ALIOR BANK is currently generating about -0.1 per unit of risk. If you would invest 29,510 in Fast Retailing Co on September 14, 2024 and sell it today you would earn a total of 4,040 from holding Fast Retailing Co or generate 13.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fast Retailing Co vs. ALIOR BANK
Performance |
| Timeline |
| Fast Retailing |
| ALIOR BANK |
Fast Retailing and ALIOR BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and ALIOR BANK
The main advantage of trading using opposite Fast Retailing and ALIOR BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, ALIOR BANK 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 ALIOR BANK will offset losses from the drop in ALIOR BANK's long position.| Fast Retailing vs. ALIOR BANK | Fast Retailing vs. Auto Trader Group | Fast Retailing vs. TRADEGATE | Fast Retailing vs. QURATE RETAIL 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |