Correlation Between CSL and Fast Retailing
Can any of the company-specific risk be diversified away by investing in both CSL 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 CSL and Fast Retailing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSL and Fast Retailing Co, you can compare the effects of market volatilities on CSL 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 CSL with a short position of Fast Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSL and Fast Retailing.
Diversification Opportunities for CSL and Fast Retailing
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CSL and Fast is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding CSL and Fast Retailing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Retailing and CSL 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 CSL 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 CSL i.e., CSL and Fast Retailing go up and down completely randomly.
Pair Corralation between CSL and Fast Retailing
Assuming the 90 days horizon CSL is expected to generate 0.75 times more return on investment than Fast Retailing. However, CSL is 1.33 times less risky than Fast Retailing. It trades about 0.12 of its potential returns per unit of risk. Fast Retailing Co is currently generating about -0.03 per unit of risk. If you would invest 7,915 in CSL on April 26, 2025 and sell it today you would earn a total of 902.00 from holding CSL or generate 11.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CSL vs. Fast Retailing Co
Performance |
Timeline |
CSL |
Fast Retailing |
CSL and Fast Retailing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CSL and Fast Retailing
The main advantage of trading using opposite CSL and Fast Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSL 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.CSL vs. CSL Limited | CSL vs. Pmv Pharmaceuticals | CSL vs. Novo Nordisk AS | CSL vs. Kalvista Pharmaceuticals |
Fast Retailing vs. Aritzia | Fast Retailing vs. Boozt AB | Fast Retailing vs. Citi Trends | Fast Retailing vs. Fast Retailing Co |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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