Correlation Between FGI Industries and Tempur Sealy
Can any of the company-specific risk be diversified away by investing in both FGI Industries and Tempur Sealy 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 Tempur Sealy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FGI Industries and Tempur Sealy International, you can compare the effects of market volatilities on FGI Industries and Tempur Sealy 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 Tempur Sealy. Check out your portfolio center. Please also check ongoing floating volatility patterns of FGI Industries and Tempur Sealy.
Diversification Opportunities for FGI Industries and Tempur Sealy
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FGI and Tempur is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding FGI Industries and Tempur Sealy International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tempur Sealy Interna 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 Tempur Sealy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tempur Sealy Interna has no effect on the direction of FGI Industries i.e., FGI Industries and Tempur Sealy go up and down completely randomly.
Pair Corralation between FGI Industries and Tempur Sealy
Considering the 90-day investment horizon FGI Industries is expected to generate 2.9 times more return on investment than Tempur Sealy. However, FGI Industries is 2.9 times more volatile than Tempur Sealy International. It trades about 0.05 of its potential returns per unit of risk. Tempur Sealy International is currently generating about 0.08 per unit of risk. If you would invest 74.00 in FGI Industries on August 31, 2024 and sell it today you would earn a total of 5.00 from holding FGI Industries or generate 6.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FGI Industries vs. Tempur Sealy International
Performance |
| Timeline |
| FGI Industries |
| Tempur Sealy Interna |
FGI Industries and Tempur Sealy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FGI Industries and Tempur Sealy
The main advantage of trading using opposite FGI Industries and Tempur Sealy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FGI Industries position performs unexpectedly, Tempur Sealy 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 Tempur Sealy will offset losses from the drop in Tempur Sealy'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 |
| Tempur Sealy vs. La Z Boy Incorporated | Tempur Sealy vs. Purple Innovation | Tempur Sealy vs. MasterBrand | Tempur Sealy vs. Ethan Allen Interiors |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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