Correlation Between FAST RETAIL and Warner Music
Can any of the company-specific risk be diversified away by investing in both FAST RETAIL and Warner Music 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 Warner Music 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 Warner Music Group, you can compare the effects of market volatilities on FAST RETAIL and Warner Music 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 Warner Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAST RETAIL and Warner Music.
Diversification Opportunities for FAST RETAIL and Warner Music
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FAST and Warner is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAIL ADR and Warner Music Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warner Music 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 Warner Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warner Music Group has no effect on the direction of FAST RETAIL i.e., FAST RETAIL and Warner Music go up and down completely randomly.
Pair Corralation between FAST RETAIL and Warner Music
Assuming the 90 days trading horizon FAST RETAIL ADR is expected to generate 0.87 times more return on investment than Warner Music. However, FAST RETAIL ADR is 1.14 times less risky than Warner Music. It trades about 0.15 of its potential returns per unit of risk. Warner Music Group is currently generating about 0.08 per unit of risk. If you would invest 2,980 in FAST RETAIL ADR on September 1, 2024 and sell it today you would earn a total of 180.00 from holding FAST RETAIL ADR or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FAST RETAIL ADR vs. Warner Music Group
Performance |
| Timeline |
| FAST RETAIL ADR |
| Warner Music Group |
FAST RETAIL and Warner Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAST RETAIL and Warner Music
The main advantage of trading using opposite FAST RETAIL and Warner Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAST RETAIL position performs unexpectedly, Warner Music 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 Warner Music will offset losses from the drop in Warner Music's long position.| FAST RETAIL vs. AOYAMA TRADING | FAST RETAIL vs. Global Fashion Group | FAST RETAIL vs. Superior Plus Corp | FAST RETAIL vs. NMI Holdings |
| Warner Music vs. Wayside Technology Group | Warner Music vs. PLAY2CHILL SA ZY | Warner Music vs. VARIOUS EATERIES LS | Warner Music vs. DXC Technology Co |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |