Correlation Between Fast Retailing and SunOpta
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and SunOpta 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 SunOpta 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 SunOpta, you can compare the effects of market volatilities on Fast Retailing and SunOpta 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 SunOpta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and SunOpta.
Diversification Opportunities for Fast Retailing and SunOpta
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fast and SunOpta is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta 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 SunOpta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunOpta has no effect on the direction of Fast Retailing i.e., Fast Retailing and SunOpta go up and down completely randomly.
Pair Corralation between Fast Retailing and SunOpta
Assuming the 90 days horizon Fast Retailing is expected to generate 2.22 times less return on investment than SunOpta. In addition to that, Fast Retailing is 1.14 times more volatile than SunOpta. It trades about 0.05 of its total potential returns per unit of risk. SunOpta is currently generating about 0.13 per unit of volatility. If you would invest 753.00 in SunOpta on September 14, 2024 and sell it today you would earn a total of 28.00 from holding SunOpta or generate 3.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fast Retailing Co vs. SunOpta
Performance |
| Timeline |
| Fast Retailing |
| SunOpta |
Fast Retailing and SunOpta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and SunOpta
The main advantage of trading using opposite Fast Retailing and SunOpta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, SunOpta 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 SunOpta will offset losses from the drop in SunOpta's long position.| Fast Retailing vs. Industria de Diseno | Fast Retailing vs. Aritzia | Fast Retailing vs. Shoe Carnival | Fast Retailing vs. Genesco |
| SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products |
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 Stocks Directory module to find actively traded stocks across global markets.
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