Correlation Between Transportadora and FAST RETAIL
Can any of the company-specific risk be diversified away by investing in both Transportadora 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 Transportadora and FAST RETAIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transportadora de Gas and FAST RETAIL ADR, you can compare the effects of market volatilities on Transportadora 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 Transportadora with a short position of FAST RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and FAST RETAIL.
Diversification Opportunities for Transportadora and FAST RETAIL
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Transportadora and FAST is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas 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 Transportadora 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 Transportadora de Gas 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 Transportadora i.e., Transportadora and FAST RETAIL go up and down completely randomly.
Pair Corralation between Transportadora and FAST RETAIL
Assuming the 90 days trading horizon Transportadora de Gas is expected to generate 1.77 times more return on investment than FAST RETAIL. However, Transportadora is 1.77 times more volatile than FAST RETAIL ADR. It trades about 0.35 of its potential returns per unit of risk. FAST RETAIL ADR is currently generating about 0.06 per unit of risk. If you would invest 1,690 in Transportadora de Gas on August 29, 2024 and sell it today you would earn a total of 1,190 from holding Transportadora de Gas or generate 70.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transportadora de Gas vs. FAST RETAIL ADR
Performance |
| Timeline |
| Transportadora de Gas |
| FAST RETAIL ADR |
Transportadora and FAST RETAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and FAST RETAIL
The main advantage of trading using opposite Transportadora and FAST RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora 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.| Transportadora vs. China Datang | Transportadora vs. Stewart Information Services | Transportadora vs. SOLSTAD OFFSHORE NK | Transportadora vs. EIDESVIK OFFSHORE NK |
| FAST RETAIL vs. SIDETRADE EO 1 | FAST RETAIL vs. RETAIL FOOD GROUP | FAST RETAIL vs. China Resources Beer | FAST RETAIL vs. CARSALESCOM |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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