Correlation Between FAST RETAILCOSPHDR and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both FAST RETAILCOSPHDR and Strategic Investments 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 RETAILCOSPHDR and Strategic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FAST RETAILCOSPHDR 1 and Strategic Investments AS, you can compare the effects of market volatilities on FAST RETAILCOSPHDR and Strategic Investments 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 RETAILCOSPHDR with a short position of Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAST RETAILCOSPHDR and Strategic Investments.
Diversification Opportunities for FAST RETAILCOSPHDR and Strategic Investments
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FAST and Strategic is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAILCOSPHDR 1 and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments and FAST RETAILCOSPHDR 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 RETAILCOSPHDR 1 are associated (or correlated) with Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of FAST RETAILCOSPHDR i.e., FAST RETAILCOSPHDR and Strategic Investments go up and down completely randomly.
Pair Corralation between FAST RETAILCOSPHDR and Strategic Investments
Assuming the 90 days trading horizon FAST RETAILCOSPHDR is expected to generate 1.24 times less return on investment than Strategic Investments. But when comparing it to its historical volatility, FAST RETAILCOSPHDR 1 is 1.64 times less risky than Strategic Investments. It trades about 0.05 of its potential returns per unit of risk. Strategic Investments AS is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 8.80 in Strategic Investments AS on September 3, 2024 and sell it today you would earn a total of 5.20 from holding Strategic Investments AS or generate 59.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FAST RETAILCOSPHDR 1 vs. Strategic Investments AS
Performance |
| Timeline |
| FAST RETAILCOSPHDR |
| Strategic Investments |
FAST RETAILCOSPHDR and Strategic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAST RETAILCOSPHDR and Strategic Investments
The main advantage of trading using opposite FAST RETAILCOSPHDR and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAST RETAILCOSPHDR position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' long position.| FAST RETAILCOSPHDR vs. FAST RETAIL ADR | FAST RETAILCOSPHDR vs. Ross Stores | FAST RETAILCOSPHDR vs. Genesco | FAST RETAILCOSPHDR vs. Stitch Fix |
| Strategic Investments vs. Japan Tobacco | Strategic Investments vs. MAROC TELECOM | Strategic Investments vs. REGAL HOTEL INTL | Strategic Investments vs. Host Hotels Resorts |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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