Correlation Between Fast Retailing and Genfit
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and Genfit 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 Genfit 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 Genfit, you can compare the effects of market volatilities on Fast Retailing and Genfit 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 Genfit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and Genfit.
Diversification Opportunities for Fast Retailing and Genfit
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fast and Genfit is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and Genfit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit 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 Genfit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genfit has no effect on the direction of Fast Retailing i.e., Fast Retailing and Genfit go up and down completely randomly.
Pair Corralation between Fast Retailing and Genfit
Assuming the 90 days horizon Fast Retailing Co is expected to generate 0.52 times more return on investment than Genfit. However, Fast Retailing Co is 1.92 times less risky than Genfit. It trades about 0.05 of its potential returns per unit of risk. Genfit is currently generating about -0.44 per unit of risk. If you would invest 33,100 in Fast Retailing Co on September 14, 2024 and sell it today you would earn a total of 490.00 from holding Fast Retailing Co or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fast Retailing Co vs. Genfit
Performance |
| Timeline |
| Fast Retailing |
| Genfit |
Fast Retailing and Genfit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and Genfit
The main advantage of trading using opposite Fast Retailing and Genfit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, Genfit 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 Genfit will offset losses from the drop in Genfit's long position.| Fast Retailing vs. Industria de Diseno | Fast Retailing vs. Aritzia | Fast Retailing vs. Shoe Carnival | Fast Retailing vs. Genesco |
| Genfit vs. Puma Biotechnology | Genfit vs. Iovance Biotherapeutics | Genfit vs. Sarepta Therapeutics | Genfit vs. Day One Biopharmaceuticals |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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