Correlation Between FAST RETAIL and Grand Canyon
Can any of the company-specific risk be diversified away by investing in both FAST RETAIL and Grand Canyon 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 Grand Canyon 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 Grand Canyon Education, you can compare the effects of market volatilities on FAST RETAIL and Grand Canyon 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 Grand Canyon. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAST RETAIL and Grand Canyon.
Diversification Opportunities for FAST RETAIL and Grand Canyon
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FAST and Grand is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAIL ADR and Grand Canyon Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Canyon Education 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 Grand Canyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Canyon Education has no effect on the direction of FAST RETAIL i.e., FAST RETAIL and Grand Canyon go up and down completely randomly.
Pair Corralation between FAST RETAIL and Grand Canyon
Assuming the 90 days trading horizon FAST RETAIL ADR is expected to generate 0.93 times more return on investment than Grand Canyon. However, FAST RETAIL ADR is 1.07 times less risky than Grand Canyon. It trades about 0.35 of its potential returns per unit of risk. Grand Canyon Education is currently generating about -0.06 per unit of risk. If you would invest 2,940 in FAST RETAIL ADR on September 13, 2024 and sell it today you would earn a total of 360.00 from holding FAST RETAIL ADR or generate 12.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FAST RETAIL ADR vs. Grand Canyon Education
Performance |
| Timeline |
| FAST RETAIL ADR |
| Grand Canyon Education |
FAST RETAIL and Grand Canyon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAST RETAIL and Grand Canyon
The main advantage of trading using opposite FAST RETAIL and Grand Canyon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAST RETAIL position performs unexpectedly, Grand Canyon 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 Grand Canyon will offset losses from the drop in Grand Canyon's long position.| FAST RETAIL vs. CCC SA | FAST RETAIL vs. AOYAMA TRADING | FAST RETAIL vs. Superior Plus Corp | FAST RETAIL vs. SIVERS SEMICONDUCTORS AB |
| Grand Canyon vs. Corsair Gaming | Grand Canyon vs. HF SINCLAIR P | Grand Canyon vs. NORWEGIAN AIR SHUT | Grand Canyon vs. SOUTHWEST AIRLINES |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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