Correlation Between Fast Retailing and Verra Mobility
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and Verra Mobility 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 Verra Mobility 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 Verra Mobility Corp, you can compare the effects of market volatilities on Fast Retailing and Verra Mobility 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 Verra Mobility. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and Verra Mobility.
Diversification Opportunities for Fast Retailing and Verra Mobility
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fast and Verra is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and Verra Mobility Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verra Mobility Corp 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 Verra Mobility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verra Mobility Corp has no effect on the direction of Fast Retailing i.e., Fast Retailing and Verra Mobility go up and down completely randomly.
Pair Corralation between Fast Retailing and Verra Mobility
Assuming the 90 days horizon Fast Retailing Co is expected to generate 0.44 times more return on investment than Verra Mobility. However, Fast Retailing Co is 2.26 times less risky than Verra Mobility. It trades about -0.11 of its potential returns per unit of risk. Verra Mobility Corp is currently generating about -0.16 per unit of risk. If you would invest 33,100 in Fast Retailing Co on August 30, 2024 and sell it today you would lose (1,035) from holding Fast Retailing Co or give up 3.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Fast Retailing Co vs. Verra Mobility Corp
Performance |
| Timeline |
| Fast Retailing |
| Verra Mobility Corp |
Fast Retailing and Verra Mobility Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and Verra Mobility
The main advantage of trading using opposite Fast Retailing and Verra Mobility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, Verra Mobility 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 Verra Mobility will offset losses from the drop in Verra Mobility's long position.| Fast Retailing vs. Shoe Carnival | Fast Retailing vs. Genesco | Fast Retailing vs. Ross Stores | Fast Retailing vs. Burlington Stores |
| Verra Mobility vs. International Money Express | Verra Mobility vs. Option Care Health | Verra Mobility vs. Aquagold International | Verra Mobility vs. Morningstar Unconstrained Allocation |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |