Correlation Between DAX Index and Fast Retailing
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By analyzing existing cross correlation between DAX Index and Fast Retailing Co, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Fast Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Fast Retailing.
Diversification Opportunities for DAX Index and Fast Retailing
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between DAX and Fast is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Fast Retailing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Retailing and DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Fast Retailing go up and down completely randomly.
Pair Corralation between DAX Index and Fast Retailing
Assuming the 90 days trading horizon DAX Index is expected to generate 2.05 times less return on investment than Fast Retailing. But when comparing it to its historical volatility, DAX Index is 2.31 times less risky than Fast Retailing. It trades about 0.09 of its potential returns per unit of risk. Fast Retailing Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 24,400 in Fast Retailing Co on August 29, 2024 and sell it today you would earn a total of 7,100 from holding Fast Retailing Co or generate 29.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Fast Retailing Co
Performance |
| Timeline |
DAX Index and Fast Retailing Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Fast Retailing Co
Pair trading matchups for Fast Retailing
Pair Trading with DAX Index and Fast Retailing
The main advantage of trading using opposite DAX Index and Fast Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. Gladstone Investment | DAX Index vs. REINET INVESTMENTS SCA | DAX Index vs. CarsalesCom | DAX Index vs. MARKET VECTR RETAIL |
| Fast Retailing vs. Apple Inc | Fast Retailing vs. Apple Inc | Fast Retailing vs. Superior Plus Corp | Fast Retailing vs. SIVERS SEMICONDUCTORS AB |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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