Correlation Between Fundamental Global and FGI Industries
Can any of the company-specific risk be diversified away by investing in both Fundamental Global and FGI Industries 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 Fundamental Global and FGI Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fundamental Global and FGI Industries, you can compare the effects of market volatilities on Fundamental Global and FGI Industries 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 Fundamental Global with a short position of FGI Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fundamental Global and FGI Industries.
Diversification Opportunities for Fundamental Global and FGI Industries
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fundamental and FGI is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Fundamental Global and FGI Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FGI Industries and Fundamental Global 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 Fundamental Global are associated (or correlated) with FGI Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FGI Industries has no effect on the direction of Fundamental Global i.e., Fundamental Global and FGI Industries go up and down completely randomly.
Pair Corralation between Fundamental Global and FGI Industries
Considering the 90-day investment horizon Fundamental Global is expected to generate 2.0 times more return on investment than FGI Industries. However, Fundamental Global is 2.0 times more volatile than FGI Industries. It trades about 0.16 of its potential returns per unit of risk. FGI Industries is currently generating about -0.01 per unit of risk. If you would invest 2,333 in Fundamental Global on August 27, 2024 and sell it today you would earn a total of 769.00 from holding Fundamental Global or generate 32.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fundamental Global vs. FGI Industries
Performance |
| Timeline |
| Fundamental Global |
| FGI Industries |
Fundamental Global and FGI Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fundamental Global and FGI Industries
The main advantage of trading using opposite Fundamental Global and FGI Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fundamental Global position performs unexpectedly, FGI Industries 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 FGI Industries will offset losses from the drop in FGI Industries' long position.| Fundamental Global vs. International General Insurance | Fundamental Global vs. BB Seguridade Participacoes | Fundamental Global vs. Goosehead Insurance | Fundamental Global vs. Enstar Group Limited |
| FGI Industries vs. Bassett Furniture Industries | FGI Industries vs. Ethan Allen Interiors | FGI Industries vs. Natuzzi SpA | FGI Industries vs. Flexsteel Industries |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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