Correlation Between Expeditors International and FAST RETAIL

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

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

Diversification Opportunities for Expeditors International and FAST RETAIL

-0.02

Correlation Coefficient

Expeditors International  FAST RETAIL

Good diversification

The 3 months correlation between Expeditors and FAST is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Expeditors International of 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 Expeditors International 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 Expeditors International of 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 Expeditors International i.e., Expeditors International and FAST RETAIL go up and down completely randomly.

Pair Corralation between Expeditors International and FAST RETAIL

Assuming the 90 days trading horizon Expeditors International of is expected to under-perform the FAST RETAIL. But the stock apears to be less risky and, when comparing its historical volatility, Expeditors International of is 2.8 times less risky than FAST RETAIL. The stock trades about -0.41 of its potential returns per unit of risk. The FAST RETAIL ADR is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  3,340  in FAST RETAIL ADR on October 10, 2024 and sell it today you would lose (60.00) from holding FAST RETAIL ADR or give up 1.8% of portfolio value over 90 days.

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

Expeditors International of  vs.  FAST RETAIL ADR

Expeditors International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Expeditors International of has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Expeditors International is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

FAST RETAIL ADR

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FAST RETAIL ADR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FAST RETAIL may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Expeditors International and FAST RETAIL

The main advantage of trading using opposite Expeditors International and FAST RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expeditors International 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 Expeditors International of 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.