Correlation Between FGI Industries and SEB SA
Can any of the company-specific risk be diversified away by investing in both FGI Industries and SEB SA 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 SEB SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FGI Industries and SEB SA, you can compare the effects of market volatilities on FGI Industries and SEB SA 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 SEB SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of FGI Industries and SEB SA.
Diversification Opportunities for FGI Industries and SEB SA
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FGI and SEB is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding FGI Industries and SEB SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEB SA 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 SEB SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEB SA has no effect on the direction of FGI Industries i.e., FGI Industries and SEB SA go up and down completely randomly.
Pair Corralation between FGI Industries and SEB SA
Considering the 90-day investment horizon FGI Industries is expected to generate 2.09 times more return on investment than SEB SA. However, FGI Industries is 2.09 times more volatile than SEB SA. It trades about -0.01 of its potential returns per unit of risk. SEB SA is currently generating about -0.04 per unit of risk. If you would invest 147.00 in FGI Industries on September 14, 2024 and sell it today you would lose (62.00) from holding FGI Industries or give up 42.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 57.03% |
| Values | Daily Returns |
FGI Industries vs. SEB SA
Performance |
| Timeline |
| FGI Industries |
| SEB SA |
FGI Industries and SEB SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FGI Industries and SEB SA
The main advantage of trading using opposite FGI Industries and SEB SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FGI Industries position performs unexpectedly, SEB SA 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 SEB SA will offset losses from the drop in SEB SA'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 |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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