Correlation Between FAST RETAIL and MSA Safety
Can any of the company-specific risk be diversified away by investing in both FAST RETAIL and MSA Safety 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 MSA Safety 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 MSA Safety Incorporated, you can compare the effects of market volatilities on FAST RETAIL and MSA Safety 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 MSA Safety. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAST RETAIL and MSA Safety.
Diversification Opportunities for FAST RETAIL and MSA Safety
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FAST and MSA is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAIL ADR and MSA Safety Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSA Safety 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 MSA Safety. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSA Safety has no effect on the direction of FAST RETAIL i.e., FAST RETAIL and MSA Safety go up and down completely randomly.
Pair Corralation between FAST RETAIL and MSA Safety
Assuming the 90 days trading horizon FAST RETAIL ADR is expected to generate 1.45 times more return on investment than MSA Safety. However, FAST RETAIL is 1.45 times more volatile than MSA Safety Incorporated. It trades about 0.09 of its potential returns per unit of risk. MSA Safety Incorporated is currently generating about -0.05 per unit of risk. If you would invest 2,368 in FAST RETAIL ADR on October 18, 2024 and sell it today you would earn a total of 552.00 from holding FAST RETAIL ADR or generate 23.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FAST RETAIL ADR vs. MSA Safety Incorporated
Performance |
| Timeline |
| FAST RETAIL ADR |
| MSA Safety |
FAST RETAIL and MSA Safety Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAST RETAIL and MSA Safety
The main advantage of trading using opposite FAST RETAIL and MSA Safety positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAST RETAIL position performs unexpectedly, MSA Safety 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 MSA Safety will offset losses from the drop in MSA Safety's long position.| FAST RETAIL vs. MAGIC SOFTWARE ENTR | FAST RETAIL vs. OPERA SOFTWARE | FAST RETAIL vs. Constellation Software | FAST RETAIL vs. PSI Software AG |
| MSA Safety vs. JIAHUA STORES | MSA Safety vs. SAN MIGUEL BREWERY | MSA Safety vs. FAST RETAIL ADR | MSA Safety vs. MOLSON RS BEVERAGE |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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