Correlation Between FAST RETAIL and Ming Le

Can any of the company-specific risk be diversified away by investing in both FAST RETAIL and Ming Le 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 Ming Le 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 Ming Le Sports, you can compare the effects of market volatilities on FAST RETAIL and Ming Le 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 Ming Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAST RETAIL and Ming Le.

Diversification Opportunities for FAST RETAIL and Ming Le

0.0

Correlation Coefficient

FAST RETAIL  Ming Le

Pay attention - limited upside

The 3 months correlation between FAST and Ming is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAIL ADR and Ming Le Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Le Sports 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 Ming Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Le Sports has no effect on the direction of FAST RETAIL i.e., FAST RETAIL and Ming Le go up and down completely randomly.

Pair Corralation between FAST RETAIL and Ming Le

If you would invest (100.00) in Ming Le Sports on October 11, 2024 and sell it today you would earn a total of  100.00  from holding Ming Le Sports or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

FAST RETAIL ADR  vs.  Ming Le Sports

FAST RETAIL ADR

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ming Le Sports

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ming Le Sports has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Ming Le 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 Ming Le

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

The idea behind FAST RETAIL ADR and Ming Le Sports 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.