Correlation Between Fast Retailing and Anterix
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and Anterix 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 Retailing and Anterix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fast Retailing Co and Anterix, you can compare the effects of market volatilities on Fast Retailing and Anterix 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 Retailing with a short position of Anterix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and Anterix.
Diversification Opportunities for Fast Retailing and Anterix
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fast and Anterix is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and Anterix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anterix and Fast Retailing 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 Retailing Co are associated (or correlated) with Anterix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anterix has no effect on the direction of Fast Retailing i.e., Fast Retailing and Anterix go up and down completely randomly.
Pair Corralation between Fast Retailing and Anterix
Assuming the 90 days horizon Fast Retailing is expected to generate 1.22 times less return on investment than Anterix. But when comparing it to its historical volatility, Fast Retailing Co is 1.4 times less risky than Anterix. It trades about 0.05 of its potential returns per unit of risk. Anterix is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,362 in Anterix on September 14, 2024 and sell it today you would earn a total of 54.00 from holding Anterix or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fast Retailing Co vs. Anterix
Performance |
| Timeline |
| Fast Retailing |
| Anterix |
Fast Retailing and Anterix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and Anterix
The main advantage of trading using opposite Fast Retailing and Anterix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, Anterix 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 Anterix will offset losses from the drop in Anterix's long position.| Fast Retailing vs. Industria de Diseno | Fast Retailing vs. Aritzia | Fast Retailing vs. Shoe Carnival | Fast Retailing vs. Genesco |
| Anterix vs. Shenandoah Telecommunications Co | Anterix vs. Liberty Broadband Corp | Anterix vs. Ooma Inc | Anterix vs. IDT Corporation |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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