Correlation Between GENERAL and Fast Retailing
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By analyzing existing cross correlation between GENERAL DYNAMICS P and Fast Retailing Co, you can compare the effects of market volatilities on GENERAL 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 GENERAL with a short position of Fast Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of GENERAL and Fast Retailing.
Diversification Opportunities for GENERAL and Fast Retailing
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GENERAL and Fast is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding GENERAL DYNAMICS P and Fast Retailing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Retailing and GENERAL 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 GENERAL DYNAMICS P 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 GENERAL i.e., GENERAL and Fast Retailing go up and down completely randomly.
Pair Corralation between GENERAL and Fast Retailing
Assuming the 90 days trading horizon GENERAL DYNAMICS P is expected to generate 0.21 times more return on investment than Fast Retailing. However, GENERAL DYNAMICS P is 4.72 times less risky than Fast Retailing. It trades about -0.14 of its potential returns per unit of risk. Fast Retailing Co is currently generating about -0.11 per unit of risk. If you would invest 9,757 in GENERAL DYNAMICS P on September 1, 2024 and sell it today you would lose (75.00) from holding GENERAL DYNAMICS P or give up 0.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GENERAL DYNAMICS P vs. Fast Retailing Co
Performance |
| Timeline |
| GENERAL DYNAMICS P |
| Fast Retailing |
GENERAL and Fast Retailing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GENERAL and Fast Retailing
The main advantage of trading using opposite GENERAL and Fast Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GENERAL 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.| GENERAL vs. Acco Brands | GENERAL vs. 51Talk Online Education | GENERAL vs. 17 Education Technology | GENERAL vs. AMREP |
| Fast Retailing vs. Industria de Diseno | Fast Retailing vs. Aritzia | Fast Retailing vs. Shoe Carnival | Fast Retailing vs. Genesco |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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