Correlation Between FAST RETAIL and Bechtle AG
Can any of the company-specific risk be diversified away by investing in both FAST RETAIL and Bechtle AG 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 Bechtle AG 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 Bechtle AG, you can compare the effects of market volatilities on FAST RETAIL and Bechtle AG 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 Bechtle AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAST RETAIL and Bechtle AG.
Diversification Opportunities for FAST RETAIL and Bechtle AG
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FAST and Bechtle is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAIL ADR and Bechtle AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bechtle AG 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 Bechtle AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bechtle AG has no effect on the direction of FAST RETAIL i.e., FAST RETAIL and Bechtle AG go up and down completely randomly.
Pair Corralation between FAST RETAIL and Bechtle AG
Assuming the 90 days trading horizon FAST RETAIL ADR is expected to generate 1.35 times more return on investment than Bechtle AG. However, FAST RETAIL is 1.35 times more volatile than Bechtle AG. It trades about 0.08 of its potential returns per unit of risk. Bechtle AG is currently generating about -0.07 per unit of risk. If you would invest 2,219 in FAST RETAIL ADR on September 4, 2024 and sell it today you would earn a total of 941.00 from holding FAST RETAIL ADR or generate 42.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FAST RETAIL ADR vs. Bechtle AG
Performance |
| Timeline |
| FAST RETAIL ADR |
| Bechtle AG |
FAST RETAIL and Bechtle AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAST RETAIL and Bechtle AG
The main advantage of trading using opposite FAST RETAIL and Bechtle AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAST RETAIL position performs unexpectedly, Bechtle AG 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 Bechtle AG will offset losses from the drop in Bechtle AG's long position.| FAST RETAIL vs. FAST RETAILCOSPHDR 1 | FAST RETAIL vs. Ross Stores | FAST RETAIL vs. Genesco | FAST RETAIL vs. Stitch Fix |
| Bechtle AG vs. Check Point Software | Bechtle AG vs. ATOSS SOFTWARE | Bechtle AG vs. FAST RETAIL ADR | Bechtle AG 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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