Correlation Between Fast Retailing and Nexxen International
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and Nexxen International 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 Nexxen International 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 Nexxen International, you can compare the effects of market volatilities on Fast Retailing and Nexxen International 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 Nexxen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and Nexxen International.
Diversification Opportunities for Fast Retailing and Nexxen International
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fast and Nexxen is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and Nexxen International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexxen International 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 Nexxen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexxen International has no effect on the direction of Fast Retailing i.e., Fast Retailing and Nexxen International go up and down completely randomly.
Pair Corralation between Fast Retailing and Nexxen International
Assuming the 90 days horizon Fast Retailing is expected to generate 15.96 times less return on investment than Nexxen International. But when comparing it to its historical volatility, Fast Retailing Co is 3.24 times less risky than Nexxen International. It trades about 0.05 of its potential returns per unit of risk. Nexxen International is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 796.00 in Nexxen International on September 5, 2024 and sell it today you would earn a total of 239.00 from holding Nexxen International or generate 30.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fast Retailing Co vs. Nexxen International
Performance |
| Timeline |
| Fast Retailing |
| Nexxen International |
Fast Retailing and Nexxen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and Nexxen International
The main advantage of trading using opposite Fast Retailing and Nexxen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, Nexxen International 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 Nexxen International will offset losses from the drop in Nexxen International's long position.| Fast Retailing vs. Industria de Diseno | Fast Retailing vs. Aritzia | Fast Retailing vs. Shoe Carnival | Fast Retailing vs. Genesco |
| Nexxen International vs. Ihuman Inc | Nexxen International vs. Udemy Inc | Nexxen International vs. Inflection Point Acquisition | Nexxen International vs. Bright Scholar Education |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |