Correlation Between FAST RETAILCOSPHDR and FAST RETAIL

Can any of the company-specific risk be diversified away by investing in both FAST RETAILCOSPHDR 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 FAST RETAILCOSPHDR and FAST RETAIL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FAST RETAILCOSPHDR 1 and FAST RETAIL ADR, you can compare the effects of market volatilities on FAST RETAILCOSPHDR 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 FAST RETAILCOSPHDR with a short position of FAST RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAST RETAILCOSPHDR and FAST RETAIL.

Diversification Opportunities for FAST RETAILCOSPHDR and FAST RETAIL

0.8

Correlation Coefficient

FAST RETAILCOSPHDR  FAST RETAIL

Very poor diversification

The 3 months correlation between FAST and FAST is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAILCOSPHDR 1 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 FAST RETAILCOSPHDR 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 FAST RETAILCOSPHDR 1 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 FAST RETAILCOSPHDR i.e., FAST RETAILCOSPHDR and FAST RETAIL go up and down completely randomly.

Pair Corralation between FAST RETAILCOSPHDR and FAST RETAIL

Assuming the 90 days trading horizon FAST RETAILCOSPHDR 1 is expected to generate 2.31 times more return on investment than FAST RETAIL. However, FAST RETAILCOSPHDR is 2.31 times more volatile than FAST RETAIL ADR. It trades about 0.05 of its potential returns per unit of risk. FAST RETAIL ADR is currently generating about 0.09 per unit of risk. If you would invest  274.00  in FAST RETAILCOSPHDR 1 on September 3, 2024 and sell it today you would earn a total of  22.00  from holding FAST RETAILCOSPHDR 1 or generate 8.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

FAST RETAILCOSPHDR 1  vs.  FAST RETAIL ADR

FAST RETAILCOSPHDR

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FAST RETAILCOSPHDR 1 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FAST RETAILCOSPHDR reported solid returns over the last few months and may actually be approaching a breakup point.

FAST RETAIL ADR

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FAST RETAIL ADR are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, FAST RETAIL may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with FAST RETAILCOSPHDR and FAST RETAIL

The main advantage of trading using opposite FAST RETAILCOSPHDR and FAST RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAST RETAILCOSPHDR 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.

The idea behind FAST RETAILCOSPHDR 1 and FAST RETAIL ADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.