Correlation Between FAST RETAIL and GENTING SG

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

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

Diversification Opportunities for FAST RETAIL and GENTING SG

-0.22

Correlation Coefficient

FAST RETAIL  GENTING SG

Very good diversification

The 3 months correlation between FAST and GENTING is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAIL ADR and GENTING SG LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENTING SG LTD and FAST RETAIL 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 RETAIL ADR are associated (or correlated) with GENTING SG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENTING SG LTD has no effect on the direction of FAST RETAIL i.e., FAST RETAIL and GENTING SG go up and down completely randomly.

Pair Corralation between FAST RETAIL and GENTING SG

Assuming the 90 days trading horizon FAST RETAIL ADR is expected to under-perform the GENTING SG. But the stock apears to be less risky and, when comparing its historical volatility, FAST RETAIL ADR is 2.75 times less risky than GENTING SG. The stock trades about -0.07 of its potential returns per unit of risk. The GENTING SG LTD is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  54.00  in GENTING SG LTD on October 9, 2024 and sell it today you would earn a total of  0.00  from holding GENTING SG LTD or generate 0.0% return on investment over 90 days.

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

FAST RETAIL ADR  vs.  GENTING SG LTD

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.

GENTING SG LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GENTING SG LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, GENTING SG is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with FAST RETAIL and GENTING SG

The main advantage of trading using opposite FAST RETAIL and GENTING SG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAST RETAIL position performs unexpectedly, GENTING SG 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 GENTING SG will offset losses from the drop in GENTING SG's long position.

The idea behind FAST RETAIL ADR and GENTING SG LTD 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.