Correlation Between FAST RETAIL and KOOL2PLAY
Can any of the company-specific risk be diversified away by investing in both FAST RETAIL and KOOL2PLAY 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 KOOL2PLAY 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 KOOL2PLAY SA ZY, you can compare the effects of market volatilities on FAST RETAIL and KOOL2PLAY 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 KOOL2PLAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAST RETAIL and KOOL2PLAY.
Diversification Opportunities for FAST RETAIL and KOOL2PLAY
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between FAST and KOOL2PLAY is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAIL ADR and KOOL2PLAY SA ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOOL2PLAY SA ZY 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 KOOL2PLAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOOL2PLAY SA ZY has no effect on the direction of FAST RETAIL i.e., FAST RETAIL and KOOL2PLAY go up and down completely randomly.
Pair Corralation between FAST RETAIL and KOOL2PLAY
Assuming the 90 days trading horizon FAST RETAIL ADR is expected to generate 0.2 times more return on investment than KOOL2PLAY. However, FAST RETAIL ADR is 4.98 times less risky than KOOL2PLAY. It trades about -0.17 of its potential returns per unit of risk. KOOL2PLAY SA ZY is currently generating about -0.12 per unit of risk. If you would invest 3,300 in FAST RETAIL ADR on October 11, 2024 and sell it today you would lose (180.00) from holding FAST RETAIL ADR or give up 5.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FAST RETAIL ADR vs. KOOL2PLAY SA ZY
Performance |
| Timeline |
| FAST RETAIL ADR |
| KOOL2PLAY SA ZY |
FAST RETAIL and KOOL2PLAY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAST RETAIL and KOOL2PLAY
The main advantage of trading using opposite FAST RETAIL and KOOL2PLAY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAST RETAIL position performs unexpectedly, KOOL2PLAY 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 KOOL2PLAY will offset losses from the drop in KOOL2PLAY's long position.| FAST RETAIL vs. Superior Plus Corp | FAST RETAIL vs. NMI Holdings | FAST RETAIL vs. SIVERS SEMICONDUCTORS AB | FAST RETAIL vs. Talanx AG |
| KOOL2PLAY vs. Sunny Optical Technology | KOOL2PLAY vs. AEON STORES | KOOL2PLAY vs. GLG LIFE TECH | KOOL2PLAY vs. FAST RETAIL ADR |
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.
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