Correlation Between FAST RETAIL and Sydbank AS

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

Diversification Opportunities for FAST RETAIL and Sydbank AS

-0.8

Correlation Coefficient

FAST RETAIL  Sydbank AS

Pay attention - limited upside

The 3 months correlation between FAST and Sydbank is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAIL ADR and Sydbank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank AS 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 Sydbank AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sydbank AS has no effect on the direction of FAST RETAIL i.e., FAST RETAIL and Sydbank AS go up and down completely randomly.

Pair Corralation between FAST RETAIL and Sydbank AS

Assuming the 90 days trading horizon FAST RETAIL ADR is expected to under-perform the Sydbank AS. In addition to that, FAST RETAIL is 1.14 times more volatile than Sydbank AS. It trades about -0.14 of its total potential returns per unit of risk. Sydbank AS is currently generating about 0.23 per unit of volatility. If you would invest  4,775  in Sydbank AS on December 28, 2024 and sell it today you would earn a total of  1,080  from holding Sydbank AS or generate 22.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

FAST RETAIL ADR  vs.  Sydbank AS

FAST RETAIL ADR

Risk-Adjusted Performance

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 unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Sydbank AS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sydbank AS are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sydbank AS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FAST RETAIL and Sydbank AS

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

The idea behind FAST RETAIL ADR and Sydbank AS 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.