Correlation Between FAST RETAIL and Transportadora
Can any of the company-specific risk be diversified away by investing in both FAST RETAIL and Transportadora 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 Transportadora 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 Transportadora de Gas, you can compare the effects of market volatilities on FAST RETAIL and Transportadora 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 Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAST RETAIL and Transportadora.
Diversification Opportunities for FAST RETAIL and Transportadora
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between FAST and Transportadora is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAIL ADR and Transportadora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportadora de Gas 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 Transportadora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportadora de Gas has no effect on the direction of FAST RETAIL i.e., FAST RETAIL and Transportadora go up and down completely randomly.
Pair Corralation between FAST RETAIL and Transportadora
Assuming the 90 days trading horizon FAST RETAIL is expected to generate 16.27 times less return on investment than Transportadora. But when comparing it to its historical volatility, FAST RETAIL ADR is 2.48 times less risky than Transportadora. It trades about 0.06 of its potential returns per unit of risk. Transportadora de Gas is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 2,020 in Transportadora de Gas on August 29, 2024 and sell it today you would earn a total of 860.00 from holding Transportadora de Gas or generate 42.57% 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. Transportadora de Gas
Performance |
| Timeline |
| FAST RETAIL ADR |
| Transportadora de Gas |
FAST RETAIL and Transportadora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAST RETAIL and Transportadora
The main advantage of trading using opposite FAST RETAIL and Transportadora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAST RETAIL position performs unexpectedly, Transportadora 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 Transportadora will offset losses from the drop in Transportadora's long position.| FAST RETAIL vs. SIDETRADE EO 1 | FAST RETAIL vs. RETAIL FOOD GROUP | FAST RETAIL vs. China Resources Beer | FAST RETAIL vs. CARSALESCOM |
| Transportadora vs. China Datang | Transportadora vs. Stewart Information Services | Transportadora vs. SOLSTAD OFFSHORE NK | Transportadora vs. EIDESVIK OFFSHORE NK |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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