Correlation Between Fast Retailing and Fast Retailing
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and Fast Retailing 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 Fast Retailing 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 Fast Retailing Co, you can compare the effects of market volatilities on Fast Retailing and Fast Retailing 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 Fast Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and Fast Retailing.
Diversification Opportunities for Fast Retailing and Fast Retailing
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fast and Fast is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and Fast Retailing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Retailing 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 Fast Retailing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Retailing has no effect on the direction of Fast Retailing i.e., Fast Retailing and Fast Retailing go up and down completely randomly.
Pair Corralation between Fast Retailing and Fast Retailing
Assuming the 90 days horizon Fast Retailing is expected to generate 13.26 times less return on investment than Fast Retailing. But when comparing it to its historical volatility, Fast Retailing Co is 12.65 times less risky than Fast Retailing. It trades about 0.06 of its potential returns per unit of risk. Fast Retailing Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 56,600 in Fast Retailing Co on August 24, 2024 and sell it today you would lose (25,265) from holding Fast Retailing Co or give up 44.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 75.96% |
| Values | Daily Returns |
Fast Retailing Co vs. Fast Retailing Co
Performance |
| Timeline |
| Fast Retailing |
| Fast Retailing |
Fast Retailing and Fast Retailing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and Fast Retailing
The main advantage of trading using opposite Fast Retailing and Fast Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, Fast Retailing 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 Fast Retailing will offset losses from the drop in Fast Retailing's long position.| Fast Retailing vs. The TJX Companies | Fast Retailing vs. Lululemon Athletica | Fast Retailing vs. Industria de Diseo | Fast Retailing vs. Ross Stores |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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