Correlation Between Fast Retailing and Kuka AG
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and Kuka AG 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 Kuka AG 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 Kuka AG ADR, you can compare the effects of market volatilities on Fast Retailing and Kuka AG 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 Kuka AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and Kuka AG.
Diversification Opportunities for Fast Retailing and Kuka AG
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fast and Kuka is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and Kuka AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuka AG ADR 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 Kuka AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuka AG ADR has no effect on the direction of Fast Retailing i.e., Fast Retailing and Kuka AG go up and down completely randomly.
Pair Corralation between Fast Retailing and Kuka AG
If you would invest 33,100 in Fast Retailing Co on September 5, 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 | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Fast Retailing Co vs. Kuka AG ADR
Performance |
| Timeline |
| Fast Retailing |
| Kuka AG ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fast Retailing and Kuka AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and Kuka AG
The main advantage of trading using opposite Fast Retailing and Kuka AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, Kuka AG 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 Kuka AG will offset losses from the drop in Kuka AG's long position.| Fast Retailing vs. Industria de Diseno | Fast Retailing vs. Aritzia | Fast Retailing vs. Shoe Carnival | Fast Retailing vs. Genesco |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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