Correlation Between Fast Retailing and CSL
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and CSL 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 Retailing and CSL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fast Retailing Co and CSL, you can compare the effects of market volatilities on Fast Retailing and CSL 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 Retailing with a short position of CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and CSL.
Diversification Opportunities for Fast Retailing and CSL
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fast and CSL is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and CSL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL and Fast Retailing 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 Retailing Co are associated (or correlated) with CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL has no effect on the direction of Fast Retailing i.e., Fast Retailing and CSL go up and down completely randomly.
Pair Corralation between Fast Retailing and CSL
Assuming the 90 days horizon Fast Retailing Co is expected to under-perform the CSL. In addition to that, Fast Retailing is 1.27 times more volatile than CSL. It trades about -0.08 of its total potential returns per unit of risk. CSL is currently generating about 0.13 per unit of volatility. If you would invest 7,915 in CSL on April 26, 2025 and sell it today you would earn a total of 971.00 from holding CSL or generate 12.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Fast Retailing Co vs. CSL
Performance |
Timeline |
Fast Retailing |
CSL |
Fast Retailing and CSL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fast Retailing and CSL
The main advantage of trading using opposite Fast Retailing and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.Fast Retailing vs. Aritzia | Fast Retailing vs. Boozt AB | Fast Retailing vs. Citi Trends | Fast Retailing vs. Fast Retailing Co |
CSL vs. CSL Limited | CSL vs. Pmv Pharmaceuticals | CSL vs. Novo Nordisk AS | CSL vs. Kalvista Pharmaceuticals |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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