Correlation Between Fast Retailing and AMERICAN
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By analyzing existing cross correlation between Fast Retailing Co and AMERICAN EXPRESS 42, you can compare the effects of market volatilities on Fast Retailing and AMERICAN 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 AMERICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and AMERICAN.
Diversification Opportunities for Fast Retailing and AMERICAN
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fast and AMERICAN is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and AMERICAN EXPRESS 42 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN EXPRESS 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 AMERICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN EXPRESS has no effect on the direction of Fast Retailing i.e., Fast Retailing and AMERICAN go up and down completely randomly.
Pair Corralation between Fast Retailing and AMERICAN
Assuming the 90 days horizon Fast Retailing Co is expected to generate 4.37 times more return on investment than AMERICAN. However, Fast Retailing is 4.37 times more volatile than AMERICAN EXPRESS 42. It trades about 0.05 of its potential returns per unit of risk. AMERICAN EXPRESS 42 is currently generating about -0.17 per unit of risk. If you would invest 33,100 in Fast Retailing Co on September 13, 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 | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Fast Retailing Co vs. AMERICAN EXPRESS 42
Performance |
| Timeline |
| Fast Retailing |
| AMERICAN EXPRESS |
Fast Retailing and AMERICAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and AMERICAN
The main advantage of trading using opposite Fast Retailing and AMERICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, AMERICAN 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 AMERICAN will offset losses from the drop in AMERICAN's long position.| Fast Retailing vs. Aritzia | Fast Retailing vs. Boot Barn Holdings | Fast Retailing vs. Guess Inc | Fast Retailing vs. The TJX Companies |
| AMERICAN vs. AEP TEX INC | AMERICAN vs. US BANK NATIONAL | AMERICAN vs. Recursion Pharmaceuticals | AMERICAN vs. SoundHound AI |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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