Correlation Between FAST RETAIL and Reinsurance Group
Can any of the company-specific risk be diversified away by investing in both FAST RETAIL and Reinsurance Group 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 Reinsurance Group 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 Reinsurance Group of, you can compare the effects of market volatilities on FAST RETAIL and Reinsurance Group 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 Reinsurance Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAST RETAIL and Reinsurance Group.
Diversification Opportunities for FAST RETAIL and Reinsurance Group
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between FAST and Reinsurance is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAIL ADR and Reinsurance Group of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reinsurance Group 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 Reinsurance Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reinsurance Group has no effect on the direction of FAST RETAIL i.e., FAST RETAIL and Reinsurance Group go up and down completely randomly.
Pair Corralation between FAST RETAIL and Reinsurance Group
Assuming the 90 days trading horizon FAST RETAIL ADR is expected to generate 1.33 times more return on investment than Reinsurance Group. However, FAST RETAIL is 1.33 times more volatile than Reinsurance Group of. It trades about 0.19 of its potential returns per unit of risk. Reinsurance Group of is currently generating about -0.39 per unit of risk. If you would invest 2,920 in FAST RETAIL ADR on September 22, 2024 and sell it today you would earn a total of 220.00 from holding FAST RETAIL ADR or generate 7.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FAST RETAIL ADR vs. Reinsurance Group of
Performance |
| Timeline |
| FAST RETAIL ADR |
| Reinsurance Group |
FAST RETAIL and Reinsurance Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAST RETAIL and Reinsurance Group
The main advantage of trading using opposite FAST RETAIL and Reinsurance Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAST RETAIL position performs unexpectedly, Reinsurance Group 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 Reinsurance Group will offset losses from the drop in Reinsurance Group's long position.| FAST RETAIL vs. DELTA AIR LINES | FAST RETAIL vs. GALENA MINING LTD | FAST RETAIL vs. FORWARD AIR P | FAST RETAIL vs. Pentair plc |
| Reinsurance Group vs. AUST AGRICULTURAL | Reinsurance Group vs. Hanison Construction Holdings | Reinsurance Group vs. North American Construction | Reinsurance Group vs. GREENX METALS LTD |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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