Correlation Between FAST RETAIL and Jiangsu Expressway
Can any of the company-specific risk be diversified away by investing in both FAST RETAIL and Jiangsu Expressway 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 Jiangsu Expressway 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 Jiangsu Expressway, you can compare the effects of market volatilities on FAST RETAIL and Jiangsu Expressway 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 Jiangsu Expressway. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAST RETAIL and Jiangsu Expressway.
Diversification Opportunities for FAST RETAIL and Jiangsu Expressway
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FAST and Jiangsu is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAIL ADR and Jiangsu Expressway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Expressway 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 Jiangsu Expressway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Expressway has no effect on the direction of FAST RETAIL i.e., FAST RETAIL and Jiangsu Expressway go up and down completely randomly.
Pair Corralation between FAST RETAIL and Jiangsu Expressway
Assuming the 90 days trading horizon FAST RETAIL ADR is expected to under-perform the Jiangsu Expressway. But the stock apears to be less risky and, when comparing its historical volatility, FAST RETAIL ADR is 1.11 times less risky than Jiangsu Expressway. The stock trades about -0.15 of its potential returns per unit of risk. The Jiangsu Expressway is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 100.00 in Jiangsu Expressway on November 28, 2024 and sell it today you would earn a total of 4.00 from holding Jiangsu Expressway or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
FAST RETAIL ADR vs. Jiangsu Expressway
Performance |
| Timeline |
| FAST RETAIL ADR |
| Jiangsu Expressway |
FAST RETAIL and Jiangsu Expressway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAST RETAIL and Jiangsu Expressway
The main advantage of trading using opposite FAST RETAIL and Jiangsu Expressway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAST RETAIL position performs unexpectedly, Jiangsu Expressway 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 Jiangsu Expressway will offset losses from the drop in Jiangsu Expressway's long position.| FAST RETAIL vs. HK Electric Investments | FAST RETAIL vs. UNIVMUSIC GRPADR050 | FAST RETAIL vs. REGAL ASIAN INVESTMENTS | FAST RETAIL vs. Yunnan Water Investment |
| Jiangsu Expressway vs. AIR CHINA LTD | Jiangsu Expressway vs. CHINA SOUTHN AIR H | Jiangsu Expressway vs. Norwegian Air Shuttle | Jiangsu Expressway vs. Wizz Air 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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