Correlation Between Fast Retailing and Keurig Dr
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and Keurig Dr 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 Keurig Dr 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 Keurig Dr Pepper, you can compare the effects of market volatilities on Fast Retailing and Keurig Dr 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 Keurig Dr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and Keurig Dr.
Diversification Opportunities for Fast Retailing and Keurig Dr
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fast and Keurig is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and Keurig Dr Pepper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keurig Dr Pepper 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 Keurig Dr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keurig Dr Pepper has no effect on the direction of Fast Retailing i.e., Fast Retailing and Keurig Dr go up and down completely randomly.
Pair Corralation between Fast Retailing and Keurig Dr
Assuming the 90 days horizon Fast Retailing Co is expected to generate 2.83 times more return on investment than Keurig Dr. However, Fast Retailing is 2.83 times more volatile than Keurig Dr Pepper. It trades about 0.05 of its potential returns per unit of risk. Keurig Dr Pepper is currently generating about 0.01 per unit of risk. If you would invest 23,578 in Fast Retailing Co on January 7, 2025 and sell it today you would earn a total of 6,822 from holding Fast Retailing Co or generate 28.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 40.32% |
| Values | Daily Returns |
Fast Retailing Co vs. Keurig Dr Pepper
Performance |
| Timeline |
| Fast Retailing |
| Keurig Dr Pepper |
Fast Retailing and Keurig Dr Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and Keurig Dr
The main advantage of trading using opposite Fast Retailing and Keurig Dr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, Keurig Dr 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 Keurig Dr will offset losses from the drop in Keurig Dr's long position.| Fast Retailing vs. Industria de Diseno | Fast Retailing vs. Aritzia | Fast Retailing vs. Shoe Carnival | Fast Retailing vs. Genesco |
| Keurig Dr vs. Celsius Holdings | Keurig Dr vs. Vita Coco | Keurig Dr vs. PepsiCo | Keurig Dr vs. Coca Cola Femsa SAB |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |