Correlation Between FGI Industries and Viomi Technology
Can any of the company-specific risk be diversified away by investing in both FGI Industries and Viomi Technology 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 Viomi Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FGI Industries and Viomi Technology ADR, you can compare the effects of market volatilities on FGI Industries and Viomi Technology 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 Viomi Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of FGI Industries and Viomi Technology.
Diversification Opportunities for FGI Industries and Viomi Technology
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FGI and Viomi is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding FGI Industries and Viomi Technology ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viomi Technology ADR 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 Viomi Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viomi Technology ADR has no effect on the direction of FGI Industries i.e., FGI Industries and Viomi Technology go up and down completely randomly.
Pair Corralation between FGI Industries and Viomi Technology
Considering the 90-day investment horizon FGI Industries is expected to under-perform the Viomi Technology. In addition to that, FGI Industries is 1.8 times more volatile than Viomi Technology ADR. It trades about -0.01 of its total potential returns per unit of risk. Viomi Technology ADR is currently generating about 0.05 per unit of volatility. If you would invest 135.00 in Viomi Technology ADR on August 27, 2024 and sell it today you would earn a total of 4.00 from holding Viomi Technology ADR or generate 2.96% 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. Viomi Technology ADR
Performance |
| Timeline |
| FGI Industries |
| Viomi Technology ADR |
FGI Industries and Viomi Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FGI Industries and Viomi Technology
The main advantage of trading using opposite FGI Industries and Viomi Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FGI Industries position performs unexpectedly, Viomi Technology 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 Viomi Technology will offset losses from the drop in Viomi Technology's long position.| FGI Industries vs. Bassett Furniture Industries | FGI Industries vs. Ethan Allen Interiors | FGI Industries vs. Natuzzi SpA | FGI Industries vs. Flexsteel Industries |
| Viomi Technology vs. Flexsteel Industries | Viomi Technology vs. Hamilton Beach Brands | Viomi Technology vs. Natuzzi SpA | Viomi Technology vs. Crown Crafts |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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