Correlation Between Fast Retailing and ConnectOne Bancorp
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and ConnectOne Bancorp 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 ConnectOne Bancorp 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 ConnectOne Bancorp, you can compare the effects of market volatilities on Fast Retailing and ConnectOne Bancorp 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 ConnectOne Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and ConnectOne Bancorp.
Diversification Opportunities for Fast Retailing and ConnectOne Bancorp
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fast and ConnectOne is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and ConnectOne Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConnectOne Bancorp 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 ConnectOne Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConnectOne Bancorp has no effect on the direction of Fast Retailing i.e., Fast Retailing and ConnectOne Bancorp go up and down completely randomly.
Pair Corralation between Fast Retailing and ConnectOne Bancorp
Assuming the 90 days horizon Fast Retailing Co is expected to generate 5.39 times more return on investment than ConnectOne Bancorp. However, Fast Retailing is 5.39 times more volatile than ConnectOne Bancorp. It trades about 0.05 of its potential returns per unit of risk. ConnectOne Bancorp is currently generating about 0.03 per unit of risk. If you would invest 19,143 in Fast Retailing Co on September 28, 2024 and sell it today you would earn a total of 14,117 from holding Fast Retailing Co or generate 73.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 75.96% |
| Values | Daily Returns |
Fast Retailing Co vs. ConnectOne Bancorp
Performance |
| Timeline |
| Fast Retailing |
| ConnectOne Bancorp |
Fast Retailing and ConnectOne Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and ConnectOne Bancorp
The main advantage of trading using opposite Fast Retailing and ConnectOne Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, ConnectOne Bancorp 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 ConnectOne Bancorp will offset losses from the drop in ConnectOne Bancorp's long position.| Fast Retailing vs. Aritzia | Fast Retailing vs. Boot Barn Holdings | Fast Retailing vs. Guess Inc | Fast Retailing vs. The TJX Companies |
| ConnectOne Bancorp vs. Dime Community Bancshares | ConnectOne Bancorp vs. Washington Federal | ConnectOne Bancorp vs. CNB Financial | ConnectOne Bancorp vs. First Guaranty Bancshares |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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