Correlation Between Fast Retailing and Sellas Life
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and Sellas Life 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 Sellas Life 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 Sellas Life Sciences, you can compare the effects of market volatilities on Fast Retailing and Sellas Life 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 Sellas Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and Sellas Life.
Diversification Opportunities for Fast Retailing and Sellas Life
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fast and Sellas is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and Sellas Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sellas Life Sciences 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 Sellas Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sellas Life Sciences has no effect on the direction of Fast Retailing i.e., Fast Retailing and Sellas Life go up and down completely randomly.
Pair Corralation between Fast Retailing and Sellas Life
Assuming the 90 days horizon Fast Retailing Co is expected to generate 1.95 times more return on investment than Sellas Life. However, Fast Retailing is 1.95 times more volatile than Sellas Life Sciences. It trades about 0.05 of its potential returns per unit of risk. Sellas Life Sciences is currently generating about 0.0 per unit of risk. If you would invest 19,143 in Fast Retailing Co on August 26, 2024 and sell it today you would earn a total of 12,192 from holding Fast Retailing Co or generate 63.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 75.05% |
| Values | Daily Returns |
Fast Retailing Co vs. Sellas Life Sciences
Performance |
| Timeline |
| Fast Retailing |
| Sellas Life Sciences |
Fast Retailing and Sellas Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and Sellas Life
The main advantage of trading using opposite Fast Retailing and Sellas Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, Sellas Life 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 Sellas Life will offset losses from the drop in Sellas Life's long position.| Fast Retailing vs. Reitmans Limited | Fast Retailing vs. Reitmans Limited | Fast Retailing vs. Lulus Fashion Lounge | Fast Retailing vs. Duluth Holdings |
| Sellas Life vs. Eliem Therapeutics | Sellas Life vs. HCW Biologics | Sellas Life vs. Scpharmaceuticals | Sellas Life vs. Milestone Pharmaceuticals |
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.
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