Correlation Between Fast Retailing and Concrete Pumping
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and Concrete Pumping 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 Concrete Pumping 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 Concrete Pumping Holdings, you can compare the effects of market volatilities on Fast Retailing and Concrete Pumping 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 Concrete Pumping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and Concrete Pumping.
Diversification Opportunities for Fast Retailing and Concrete Pumping
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fast and Concrete is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and Concrete Pumping Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concrete Pumping Holdings 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 Concrete Pumping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concrete Pumping Holdings has no effect on the direction of Fast Retailing i.e., Fast Retailing and Concrete Pumping go up and down completely randomly.
Pair Corralation between Fast Retailing and Concrete Pumping
Assuming the 90 days horizon Fast Retailing Co is expected to generate 0.59 times more return on investment than Concrete Pumping. However, Fast Retailing Co is 1.69 times less risky than Concrete Pumping. It trades about 0.05 of its potential returns per unit of risk. Concrete Pumping Holdings is currently generating about 0.02 per unit of risk. If you would invest 19,143 in Fast Retailing Co on September 14, 2024 and sell it today you would earn a total of 14,447 from holding Fast Retailing Co or generate 75.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 38.13% |
| Values | Daily Returns |
Fast Retailing Co vs. Concrete Pumping Holdings
Performance |
| Timeline |
| Fast Retailing |
| Concrete Pumping Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fast Retailing and Concrete Pumping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and Concrete Pumping
The main advantage of trading using opposite Fast Retailing and Concrete Pumping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, Concrete Pumping 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 Concrete Pumping will offset losses from the drop in Concrete Pumping's long position.| Fast Retailing vs. Industria de Diseno | Fast Retailing vs. Aritzia | Fast Retailing vs. Shoe Carnival | Fast Retailing vs. Genesco |
| Concrete Pumping vs. Fernhill Beverage | Concrete Pumping vs. Fast Retailing Co | Concrete Pumping vs. Anheuser Busch Inbev | Concrete Pumping vs. National Beverage Corp |
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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