Correlation Between FAST RETAIL and Caseys General
Can any of the company-specific risk be diversified away by investing in both FAST RETAIL and Caseys General 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 Caseys General 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 Caseys General Stores, you can compare the effects of market volatilities on FAST RETAIL and Caseys General 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 Caseys General. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAST RETAIL and Caseys General.
Diversification Opportunities for FAST RETAIL and Caseys General
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FAST and Caseys is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAIL ADR and Caseys General Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caseys General Stores 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 Caseys General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caseys General Stores has no effect on the direction of FAST RETAIL i.e., FAST RETAIL and Caseys General go up and down completely randomly.
Pair Corralation between FAST RETAIL and Caseys General
Assuming the 90 days trading horizon FAST RETAIL ADR is expected to generate 1.11 times more return on investment than Caseys General. However, FAST RETAIL is 1.11 times more volatile than Caseys General Stores. It trades about 0.35 of its potential returns per unit of risk. Caseys General Stores is currently generating about 0.12 per unit of risk. If you would invest 2,940 in FAST RETAIL ADR on September 11, 2024 and sell it today you would earn a total of 320.00 from holding FAST RETAIL ADR or generate 10.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
FAST RETAIL ADR vs. Caseys General Stores
Performance |
Timeline |
FAST RETAIL ADR |
Caseys General Stores |
FAST RETAIL and Caseys General Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FAST RETAIL and Caseys General
The main advantage of trading using opposite FAST RETAIL and Caseys General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAST RETAIL position performs unexpectedly, Caseys General 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 Caseys General will offset losses from the drop in Caseys General's long position.FAST RETAIL vs. FARO Technologies | FAST RETAIL vs. The Hanover Insurance | FAST RETAIL vs. National Bank Holdings | FAST RETAIL vs. CHIBA BANK |
Caseys General vs. LIFENET INSURANCE CO | Caseys General vs. Singapore Reinsurance | Caseys General vs. Zurich Insurance Group | Caseys General vs. Direct Line Insurance |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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