Correlation Between FGI Industries and Ethan Allen
Can any of the company-specific risk be diversified away by investing in both FGI Industries and Ethan Allen 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 FGI Industries and Ethan Allen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FGI Industries and Ethan Allen Interiors, you can compare the effects of market volatilities on FGI Industries and Ethan Allen 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 FGI Industries with a short position of Ethan Allen. Check out your portfolio center. Please also check ongoing floating volatility patterns of FGI Industries and Ethan Allen.
Diversification Opportunities for FGI Industries and Ethan Allen
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FGI and Ethan is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding FGI Industries and Ethan Allen Interiors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethan Allen Interiors and FGI Industries 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 FGI Industries are associated (or correlated) with Ethan Allen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethan Allen Interiors has no effect on the direction of FGI Industries i.e., FGI Industries and Ethan Allen go up and down completely randomly.
Pair Corralation between FGI Industries and Ethan Allen
Considering the 90-day investment horizon FGI Industries is expected to under-perform the Ethan Allen. In addition to that, FGI Industries is 4.45 times more volatile than Ethan Allen Interiors. It trades about -0.01 of its total potential returns per unit of risk. Ethan Allen Interiors is currently generating about 0.02 per unit of volatility. If you would invest 2,920 in Ethan Allen Interiors on August 24, 2024 and sell it today you would earn a total of 11.00 from holding Ethan Allen Interiors or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FGI Industries vs. Ethan Allen Interiors
Performance |
| Timeline |
| FGI Industries |
| Ethan Allen Interiors |
FGI Industries and Ethan Allen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FGI Industries and Ethan Allen
The main advantage of trading using opposite FGI Industries and Ethan Allen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FGI Industries position performs unexpectedly, Ethan Allen 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 Ethan Allen will offset losses from the drop in Ethan Allen's long position.| FGI Industries vs. Fundamental Global | FGI Industries vs. Yoshitsu Co Ltd | FGI Industries vs. Hour Loop | FGI Industries vs. Direct Digital Holdings |
| Ethan Allen vs. Bassett Furniture Industries | Ethan Allen vs. Natuzzi SpA | Ethan Allen vs. Flexsteel Industries | Ethan Allen vs. Hamilton Beach Brands |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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