Correlation Between FAST RETAIL and Tradegate

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

Diversification Opportunities for FAST RETAIL and Tradegate

-0.22

Correlation Coefficient

FAST RETAIL  Tradegate

Very good diversification

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

Pair Corralation between FAST RETAIL and Tradegate

Assuming the 90 days trading horizon FAST RETAIL ADR is expected to generate 3.82 times more return on investment than Tradegate. However, FAST RETAIL is 3.82 times more volatile than Tradegate AG Wertpapierhandelsbank. It trades about 0.19 of its potential returns per unit of risk. Tradegate AG Wertpapierhandelsbank is currently generating about 0.0 per unit of risk. If you would invest  2,960  in FAST RETAIL ADR on September 23, 2024 and sell it today you would earn a total of  220.00  from holding FAST RETAIL ADR or generate 7.43% 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.  Tradegate AG Wertpapierhandels

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 January 2025.

Tradegate AG Wertpap

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with FAST RETAIL and Tradegate

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

The idea behind FAST RETAIL ADR and Tradegate AG Wertpapierhandelsbank 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.