Correlation Between Fast Retailing and Searchlight Solutions
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and Searchlight Solutions 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 Searchlight Solutions 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 Searchlight Solutions, you can compare the effects of market volatilities on Fast Retailing and Searchlight Solutions 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 Searchlight Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and Searchlight Solutions.
Diversification Opportunities for Fast Retailing and Searchlight Solutions
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fast and Searchlight is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and Searchlight Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Searchlight Solutions 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 Searchlight Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Searchlight Solutions has no effect on the direction of Fast Retailing i.e., Fast Retailing and Searchlight Solutions go up and down completely randomly.
Pair Corralation between Fast Retailing and Searchlight Solutions
If you would invest 31,335 in Fast Retailing Co on September 23, 2024 and sell it today you would earn a total of 1,925 from holding Fast Retailing Co or generate 6.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Fast Retailing Co vs. Searchlight Solutions
Performance |
| Timeline |
| Fast Retailing |
| Searchlight Solutions |
Fast Retailing and Searchlight Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and Searchlight Solutions
The main advantage of trading using opposite Fast Retailing and Searchlight Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, Searchlight Solutions 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 Searchlight Solutions will offset losses from the drop in Searchlight Solutions' long position.| Fast Retailing vs. Aritzia | Fast Retailing vs. Boot Barn Holdings | Fast Retailing vs. Guess Inc | Fast Retailing vs. The TJX Companies |
| Searchlight Solutions vs. Information Services Group | Searchlight Solutions vs. Home Bancorp | Searchlight Solutions vs. Heritage Financial | Searchlight Solutions vs. CRA International |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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