Correlation Between XBP Europe and Fast Retailing
Can any of the company-specific risk be diversified away by investing in both XBP Europe 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 XBP Europe and Fast Retailing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XBP Europe Holdings and Fast Retailing Co, you can compare the effects of market volatilities on XBP Europe 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 XBP Europe with a short position of Fast Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of XBP Europe and Fast Retailing.
Diversification Opportunities for XBP Europe and Fast Retailing
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between XBP and Fast is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding XBP Europe Holdings and Fast Retailing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Retailing and XBP Europe 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 XBP Europe Holdings 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 XBP Europe i.e., XBP Europe and Fast Retailing go up and down completely randomly.
Pair Corralation between XBP Europe and Fast Retailing
Considering the 90-day investment horizon XBP Europe is expected to generate 3.51 times less return on investment than Fast Retailing. In addition to that, XBP Europe is 3.41 times more volatile than Fast Retailing Co. It trades about 0.01 of its total potential returns per unit of risk. Fast Retailing Co is currently generating about 0.08 per unit of volatility. If you would invest 25,970 in Fast Retailing Co on September 2, 2024 and sell it today you would earn a total of 6,095 from holding Fast Retailing Co or generate 23.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
XBP Europe Holdings vs. Fast Retailing Co
Performance |
| Timeline |
| XBP Europe Holdings |
| Fast Retailing |
XBP Europe and Fast Retailing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XBP Europe and Fast Retailing
The main advantage of trading using opposite XBP Europe and Fast Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XBP Europe 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.| XBP Europe vs. Meiwu Technology Co | XBP Europe vs. Simon Property Group | XBP Europe vs. GEN Restaurant Group, | XBP Europe vs. Titan Machinery |
| Fast Retailing vs. Industria de Diseno | Fast Retailing vs. Shoe Carnival | Fast Retailing vs. Genesco | Fast Retailing vs. Ross Stores |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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