Correlation Between FAST RETAIL and GOODTECH ASA
Can any of the company-specific risk be diversified away by investing in both FAST RETAIL and GOODTECH ASA 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 GOODTECH ASA 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 GOODTECH ASA A, you can compare the effects of market volatilities on FAST RETAIL and GOODTECH ASA 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 GOODTECH ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAST RETAIL and GOODTECH ASA.
Diversification Opportunities for FAST RETAIL and GOODTECH ASA
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FAST and GOODTECH is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAIL ADR and GOODTECH ASA A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOODTECH ASA A 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 GOODTECH ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOODTECH ASA A has no effect on the direction of FAST RETAIL i.e., FAST RETAIL and GOODTECH ASA go up and down completely randomly.
Pair Corralation between FAST RETAIL and GOODTECH ASA
Assuming the 90 days trading horizon FAST RETAIL ADR is expected to under-perform the GOODTECH ASA. In addition to that, FAST RETAIL is 1.08 times more volatile than GOODTECH ASA A. It trades about -0.21 of its total potential returns per unit of risk. GOODTECH ASA A is currently generating about 0.07 per unit of volatility. If you would invest 86.00 in GOODTECH ASA A on October 22, 2024 and sell it today you would earn a total of 2.00 from holding GOODTECH ASA A or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
FAST RETAIL ADR vs. GOODTECH ASA A
Performance |
| Timeline |
| FAST RETAIL ADR |
| GOODTECH ASA A |
FAST RETAIL and GOODTECH ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAST RETAIL and GOODTECH ASA
The main advantage of trading using opposite FAST RETAIL and GOODTECH ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAST RETAIL position performs unexpectedly, GOODTECH ASA 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 GOODTECH ASA will offset losses from the drop in GOODTECH ASA's long position.| FAST RETAIL vs. Thai Beverage Public | FAST RETAIL vs. Highlight Communications AG | FAST RETAIL vs. Nomad Foods | FAST RETAIL vs. ecotel communication ag |
| GOODTECH ASA vs. FAST RETAIL ADR | GOODTECH ASA vs. H2O Retailing | GOODTECH ASA vs. AIR PRODCHEMICALS | GOODTECH ASA vs. Ultra Clean Holdings |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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