Correlation Between Fast Retailing and Cheviot Financial
Can any of the company-specific risk be diversified away by investing in both Fast Retailing and Cheviot Financial 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 Cheviot Financial 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 Cheviot Financial Corp, you can compare the effects of market volatilities on Fast Retailing and Cheviot Financial 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 Cheviot Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and Cheviot Financial.
Diversification Opportunities for Fast Retailing and Cheviot Financial
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fast and Cheviot is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and Cheviot Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheviot Financial Corp 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 Cheviot Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheviot Financial Corp has no effect on the direction of Fast Retailing i.e., Fast Retailing and Cheviot Financial go up and down completely randomly.
Pair Corralation between Fast Retailing and Cheviot Financial
Assuming the 90 days horizon Fast Retailing Co is expected to generate 2.24 times more return on investment than Cheviot Financial. However, Fast Retailing is 2.24 times more volatile than Cheviot Financial Corp. It trades about 0.08 of its potential returns per unit of risk. Cheviot Financial Corp is currently generating about -0.03 per unit of risk. If you would invest 32,105 in Fast Retailing Co on August 31, 2025 and sell it today you would earn a total of 3,895 from holding Fast Retailing Co or generate 12.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fast Retailing Co vs. Cheviot Financial Corp
Performance |
| Timeline |
| Fast Retailing |
| Cheviot Financial Corp |
Fast Retailing and Cheviot Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and Cheviot Financial
The main advantage of trading using opposite Fast Retailing and Cheviot Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing position performs unexpectedly, Cheviot Financial 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 Cheviot Financial will offset losses from the drop in Cheviot Financial's long position.| Fast Retailing vs. Fortress Transportation and | Fast Retailing vs. ICL Israel Chemicals | Fast Retailing vs. Consolidated Sports Media | Fast Retailing vs. Quaker Chemical |
| Cheviot Financial vs. Summit Bank Group | Cheviot Financial vs. Chemtrade Logistics Income | Cheviot Financial vs. Warner Music Group | Cheviot Financial 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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