Correlation Between FAST RETAIL and COSCO SHIPPING
Can any of the company-specific risk be diversified away by investing in both FAST RETAIL and COSCO SHIPPING 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 COSCO SHIPPING 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 COSCO SHIPPING Energy, you can compare the effects of market volatilities on FAST RETAIL and COSCO SHIPPING 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 COSCO SHIPPING. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAST RETAIL and COSCO SHIPPING.
Diversification Opportunities for FAST RETAIL and COSCO SHIPPING
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FAST and COSCO is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAIL ADR and COSCO SHIPPING Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING Energy 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 COSCO SHIPPING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSCO SHIPPING Energy has no effect on the direction of FAST RETAIL i.e., FAST RETAIL and COSCO SHIPPING go up and down completely randomly.
Pair Corralation between FAST RETAIL and COSCO SHIPPING
Assuming the 90 days trading horizon FAST RETAIL is expected to generate 2.64 times less return on investment than COSCO SHIPPING. But when comparing it to its historical volatility, FAST RETAIL ADR is 5.16 times less risky than COSCO SHIPPING. It trades about 0.35 of its potential returns per unit of risk. COSCO SHIPPING Energy is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 58.00 in COSCO SHIPPING Energy on September 13, 2024 and sell it today you would earn a total of 17.00 from holding COSCO SHIPPING Energy or generate 29.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FAST RETAIL ADR vs. COSCO SHIPPING Energy
Performance |
| Timeline |
| FAST RETAIL ADR |
| COSCO SHIPPING Energy |
FAST RETAIL and COSCO SHIPPING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAST RETAIL and COSCO SHIPPING
The main advantage of trading using opposite FAST RETAIL and COSCO SHIPPING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAST RETAIL position performs unexpectedly, COSCO SHIPPING 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 COSCO SHIPPING will offset losses from the drop in COSCO SHIPPING'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 |
| COSCO SHIPPING vs. Tri Pointe Homes | COSCO SHIPPING vs. Fair Isaac Corp | COSCO SHIPPING vs. DFS Furniture PLC | COSCO SHIPPING vs. DELTA AIR LINES |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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