Correlation Between Fast Retailing and XBP Europe
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and XBP Europe 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 XBP Europe 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 XBP Europe Holdings, you can compare the effects of market volatilities on Fast Retailing and XBP Europe 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 XBP Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and XBP Europe.
Diversification Opportunities for Fast Retailing and XBP Europe
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fast and XBP is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and XBP Europe Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XBP Europe Holdings 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 XBP Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XBP Europe Holdings has no effect on the direction of Fast Retailing i.e., Fast Retailing and XBP Europe go up and down completely randomly.
Pair Corralation between Fast Retailing and XBP Europe
Assuming the 90 days horizon Fast Retailing Co is expected to under-perform the XBP Europe. But the pink sheet apears to be less risky and, when comparing its historical volatility, Fast Retailing Co is 9.5 times less risky than XBP Europe. The pink sheet trades about -0.11 of its potential returns per unit of risk. The XBP Europe Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 100.00 in XBP Europe Holdings on September 2, 2024 and sell it today you would earn a total of 14.00 from holding XBP Europe Holdings or generate 14.0% 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. XBP Europe Holdings
Performance |
| Timeline |
| Fast Retailing |
| XBP Europe Holdings |
Fast Retailing and XBP Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and XBP Europe
The main advantage of trading using opposite Fast Retailing and XBP Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, XBP Europe 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 XBP Europe will offset losses from the drop in XBP Europe's long position.| Fast Retailing vs. Industria de Diseno | Fast Retailing vs. Shoe Carnival | Fast Retailing vs. Genesco | Fast Retailing vs. Ross Stores |
| XBP Europe vs. Meiwu Technology Co | XBP Europe vs. Simon Property Group | XBP Europe vs. GEN Restaurant Group, | XBP Europe vs. Titan Machinery |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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