Correlation Between Fast Retailing and Baozun
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and Baozun 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 Baozun 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 Baozun Inc, you can compare the effects of market volatilities on Fast Retailing and Baozun 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 Baozun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and Baozun.
Diversification Opportunities for Fast Retailing and Baozun
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fast and Baozun is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and Baozun Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baozun Inc 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 Baozun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baozun Inc has no effect on the direction of Fast Retailing i.e., Fast Retailing and Baozun go up and down completely randomly.
Pair Corralation between Fast Retailing and Baozun
Assuming the 90 days horizon Fast Retailing Co is expected to generate 0.58 times more return on investment than Baozun. However, Fast Retailing Co is 1.71 times less risky than Baozun. It trades about 0.08 of its potential returns per unit of risk. Baozun Inc is currently generating about 0.0 per unit of risk. If you would invest 21,902 in Fast Retailing Co on September 12, 2024 and sell it today you would earn a total of 11,688 from holding Fast Retailing Co or generate 53.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 69.79% |
| Values | Daily Returns |
Fast Retailing Co vs. Baozun Inc
Performance |
| Timeline |
| Fast Retailing |
| Baozun Inc |
Fast Retailing and Baozun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and Baozun
The main advantage of trading using opposite Fast Retailing and Baozun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, Baozun 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 Baozun will offset losses from the drop in Baozun's long position.| Fast Retailing vs. Industria de Diseno | Fast Retailing vs. Aritzia | Fast Retailing vs. Shoe Carnival | Fast Retailing vs. Genesco |
| Baozun vs. PDD Holdings | Baozun vs. JD Inc Adr | Baozun vs. Global E Online | Baozun vs. Vipshop Holdings Limited |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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