Correlation Between FAST RETAIL and SINGAPORE AIRLINES
Can any of the company-specific risk be diversified away by investing in both FAST RETAIL and SINGAPORE AIRLINES 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 SINGAPORE AIRLINES 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 SINGAPORE AIRLINES, you can compare the effects of market volatilities on FAST RETAIL and SINGAPORE AIRLINES 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 SINGAPORE AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAST RETAIL and SINGAPORE AIRLINES.
Diversification Opportunities for FAST RETAIL and SINGAPORE AIRLINES
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FAST and SINGAPORE is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAIL ADR and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES 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 SINGAPORE AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SINGAPORE AIRLINES has no effect on the direction of FAST RETAIL i.e., FAST RETAIL and SINGAPORE AIRLINES go up and down completely randomly.
Pair Corralation between FAST RETAIL and SINGAPORE AIRLINES
Assuming the 90 days trading horizon FAST RETAIL ADR is expected to generate 1.44 times more return on investment than SINGAPORE AIRLINES. However, FAST RETAIL is 1.44 times more volatile than SINGAPORE AIRLINES. It trades about 0.16 of its potential returns per unit of risk. SINGAPORE AIRLINES is currently generating about 0.06 per unit of risk. If you would invest 2,760 in FAST RETAIL ADR on September 12, 2024 and sell it today you would earn a total of 580.00 from holding FAST RETAIL ADR or generate 21.01% 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. SINGAPORE AIRLINES
Performance |
| Timeline |
| FAST RETAIL ADR |
| SINGAPORE AIRLINES |
FAST RETAIL and SINGAPORE AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAST RETAIL and SINGAPORE AIRLINES
The main advantage of trading using opposite FAST RETAIL and SINGAPORE AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAST RETAIL position performs unexpectedly, SINGAPORE AIRLINES 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 SINGAPORE AIRLINES will offset losses from the drop in SINGAPORE AIRLINES'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 |
| SINGAPORE AIRLINES vs. Apple Inc | SINGAPORE AIRLINES vs. Apple Inc | SINGAPORE AIRLINES vs. Apple Inc | SINGAPORE AIRLINES vs. Apple Inc |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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