Correlation Between FAST RETAIL and Major Drilling
Can any of the company-specific risk be diversified away by investing in both FAST RETAIL and Major Drilling 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 RETAIL and Major Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FAST RETAIL ADR and Major Drilling Group, you can compare the effects of market volatilities on FAST RETAIL and Major Drilling 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 RETAIL with a short position of Major Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAST RETAIL and Major Drilling.
Diversification Opportunities for FAST RETAIL and Major Drilling
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FAST and Major is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAIL ADR and Major Drilling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Drilling Group and FAST RETAIL 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 RETAIL ADR are associated (or correlated) with Major Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Drilling Group has no effect on the direction of FAST RETAIL i.e., FAST RETAIL and Major Drilling go up and down completely randomly.
Pair Corralation between FAST RETAIL and Major Drilling
Assuming the 90 days trading horizon FAST RETAIL ADR is expected to under-perform the Major Drilling. But the stock apears to be less risky and, when comparing its historical volatility, FAST RETAIL ADR is 1.62 times less risky than Major Drilling. The stock trades about -0.06 of its potential returns per unit of risk. The Major Drilling Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 555.00 in Major Drilling Group on August 25, 2024 and sell it today you would earn a total of 25.00 from holding Major Drilling Group or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FAST RETAIL ADR vs. Major Drilling Group
Performance |
| Timeline |
| FAST RETAIL ADR |
| Major Drilling Group |
FAST RETAIL and Major Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAST RETAIL and Major Drilling
The main advantage of trading using opposite FAST RETAIL and Major Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAST RETAIL position performs unexpectedly, Major Drilling 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 Major Drilling will offset losses from the drop in Major Drilling's long position.| FAST RETAIL vs. AOYAMA TRADING | FAST RETAIL vs. J JILL INC | FAST RETAIL vs. Superior Plus Corp | FAST RETAIL vs. NMI Holdings |
| Major Drilling vs. NTG Nordic Transport | Major Drilling vs. TYSON FOODS A | Major Drilling vs. SENECA FOODS A | Major Drilling vs. Gaztransport Technigaz SA |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |