Correlation Between CHINA TELECOM and Fast Retailing

Can any of the company-specific risk be diversified away by investing in both CHINA TELECOM and Fast Retailing 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 CHINA TELECOM and Fast Retailing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CHINA TELECOM H and Fast Retailing Co, you can compare the effects of market volatilities on CHINA TELECOM and Fast Retailing 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 CHINA TELECOM with a short position of Fast Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA TELECOM and Fast Retailing.

Diversification Opportunities for CHINA TELECOM and Fast Retailing

0.0

Correlation Coefficient

CHINA TELECOM  Fast Retailing

Pay attention - limited upside

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

Pair Corralation between CHINA TELECOM and Fast Retailing

If you would invest  52.00  in CHINA TELECOM H on December 26, 2024 and sell it today you would earn a total of  0.00  from holding CHINA TELECOM H or generate 0.0% return on investment over 90 days.

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

CHINA TELECOM H   vs.  Fast Retailing Co

CHINA TELECOM H

Risk-Adjusted Performance

Very Weak

Over the last 90 days CHINA TELECOM H has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, CHINA TELECOM is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Fast Retailing

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fast Retailing Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with CHINA TELECOM and Fast Retailing

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

The idea behind CHINA TELECOM H and Fast Retailing Co 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.