Correlation Between Fast Retailing and Meiwu Technology
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and Meiwu Technology 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 Meiwu Technology 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 Meiwu Technology Co, you can compare the effects of market volatilities on Fast Retailing and Meiwu Technology 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 Meiwu Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and Meiwu Technology.
Diversification Opportunities for Fast Retailing and Meiwu Technology
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fast and Meiwu is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and Meiwu Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiwu Technology 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 Meiwu Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiwu Technology has no effect on the direction of Fast Retailing i.e., Fast Retailing and Meiwu Technology go up and down completely randomly.
Pair Corralation between Fast Retailing and Meiwu Technology
Assuming the 90 days horizon Fast Retailing Co is expected to generate 0.43 times more return on investment than Meiwu Technology. However, Fast Retailing Co is 2.31 times less risky than Meiwu Technology. It trades about 0.08 of its potential returns per unit of risk. Meiwu Technology Co is currently generating about 0.02 per unit of risk. If you would invest 25,970 in Fast Retailing Co on September 1, 2024 and sell it today you would earn a total of 6,095 from holding Fast Retailing Co or generate 23.47% 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. Meiwu Technology Co
Performance |
| Timeline |
| Fast Retailing |
| Meiwu Technology |
Fast Retailing and Meiwu Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and Meiwu Technology
The main advantage of trading using opposite Fast Retailing and Meiwu Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, Meiwu Technology 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 Meiwu Technology will offset losses from the drop in Meiwu Technology's long position.| Fast Retailing vs. Industria de Diseno | Fast Retailing vs. Aritzia | Fast Retailing vs. Shoe Carnival | Fast Retailing vs. Genesco |
| Meiwu Technology vs. MOGU Inc | Meiwu Technology vs. iPower Inc | Meiwu Technology vs. Jeffs Brands | Meiwu Technology vs. Kidpik Corp |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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