Correlation Between ITALIAN WINE and FAST RETAIL
Can any of the company-specific risk be diversified away by investing in both ITALIAN WINE and FAST RETAIL 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 ITALIAN WINE and FAST RETAIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITALIAN WINE BRANDS and FAST RETAIL ADR, you can compare the effects of market volatilities on ITALIAN WINE and FAST RETAIL 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 ITALIAN WINE with a short position of FAST RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITALIAN WINE and FAST RETAIL.
Diversification Opportunities for ITALIAN WINE and FAST RETAIL
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ITALIAN and FAST is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding ITALIAN WINE BRANDS and FAST RETAIL ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAST RETAIL ADR and ITALIAN WINE 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 ITALIAN WINE BRANDS are associated (or correlated) with FAST RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAST RETAIL ADR has no effect on the direction of ITALIAN WINE i.e., ITALIAN WINE and FAST RETAIL go up and down completely randomly.
Pair Corralation between ITALIAN WINE and FAST RETAIL
Assuming the 90 days horizon ITALIAN WINE BRANDS is expected to under-perform the FAST RETAIL. In addition to that, ITALIAN WINE is 1.02 times more volatile than FAST RETAIL ADR. It trades about 0.0 of its total potential returns per unit of risk. FAST RETAIL ADR is currently generating about 0.06 per unit of volatility. If you would invest 1,863 in FAST RETAIL ADR on August 29, 2024 and sell it today you would earn a total of 1,097 from holding FAST RETAIL ADR or generate 58.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITALIAN WINE BRANDS vs. FAST RETAIL ADR
Performance |
| Timeline |
| ITALIAN WINE BRANDS |
| FAST RETAIL ADR |
ITALIAN WINE and FAST RETAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITALIAN WINE and FAST RETAIL
The main advantage of trading using opposite ITALIAN WINE and FAST RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITALIAN WINE position performs unexpectedly, FAST RETAIL 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 RETAIL will offset losses from the drop in FAST RETAIL's long position.| ITALIAN WINE vs. Merit Medical Systems | ITALIAN WINE vs. GOODYEAR T RUBBER | ITALIAN WINE vs. SCANDMEDICAL SOLDK 040 | ITALIAN WINE vs. Apollo Medical Holdings |
| FAST RETAIL vs. AOYAMA TRADING | FAST RETAIL vs. Superior Plus Corp | FAST RETAIL vs. NMI Holdings | FAST RETAIL vs. Origin Agritech |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |