Correlation Between Fossil and Figs
Can any of the company-specific risk be diversified away by investing in both Fossil and Figs 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 Fossil and Figs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fossil Group and Figs Inc, you can compare the effects of market volatilities on Fossil and Figs 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 Fossil with a short position of Figs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fossil and Figs.
Diversification Opportunities for Fossil and Figs
Good diversification
The 3 months correlation between Fossil and Figs is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Fossil Group and Figs Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figs Inc and Fossil 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 Fossil Group are associated (or correlated) with Figs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figs Inc has no effect on the direction of Fossil i.e., Fossil and Figs go up and down completely randomly.
Pair Corralation between Fossil and Figs
Given the investment horizon of 90 days Fossil Group is expected to generate 1.56 times more return on investment than Figs. However, Fossil is 1.56 times more volatile than Figs Inc. It trades about 0.07 of its potential returns per unit of risk. Figs Inc is currently generating about 0.0 per unit of risk. If you would invest 122.00 in Fossil Group on September 4, 2024 and sell it today you would earn a total of 113.00 from holding Fossil Group or generate 92.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Fossil Group vs. Figs Inc
Performance |
Timeline |
Fossil Group |
Figs Inc |
Fossil and Figs Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fossil and Figs
The main advantage of trading using opposite Fossil and Figs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fossil position performs unexpectedly, Figs 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 Figs will offset losses from the drop in Figs' long position.Fossil vs. VF Corporation | Fossil vs. Levi Strauss Co | Fossil vs. Under Armour A | Fossil vs. Columbia Sportswear |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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