Correlation Between Lifetime Brands and FGI Industries
Can any of the company-specific risk be diversified away by investing in both Lifetime Brands and FGI Industries 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 Lifetime Brands and FGI Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifetime Brands and FGI Industries, you can compare the effects of market volatilities on Lifetime Brands and FGI Industries 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 Lifetime Brands with a short position of FGI Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifetime Brands and FGI Industries.
Diversification Opportunities for Lifetime Brands and FGI Industries
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lifetime and FGI is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lifetime Brands and FGI Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FGI Industries and Lifetime Brands 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 Lifetime Brands are associated (or correlated) with FGI Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FGI Industries has no effect on the direction of Lifetime Brands i.e., Lifetime Brands and FGI Industries go up and down completely randomly.
Pair Corralation between Lifetime Brands and FGI Industries
Given the investment horizon of 90 days Lifetime Brands is expected to generate 0.43 times more return on investment than FGI Industries. However, Lifetime Brands is 2.34 times less risky than FGI Industries. It trades about 0.19 of its potential returns per unit of risk. FGI Industries is currently generating about -0.01 per unit of risk. If you would invest 525.00 in Lifetime Brands on August 28, 2024 and sell it today you would earn a total of 64.00 from holding Lifetime Brands or generate 12.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifetime Brands vs. FGI Industries
Performance |
| Timeline |
| Lifetime Brands |
| FGI Industries |
Lifetime Brands and FGI Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifetime Brands and FGI Industries
The main advantage of trading using opposite Lifetime Brands and FGI Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifetime Brands position performs unexpectedly, FGI Industries 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 FGI Industries will offset losses from the drop in FGI Industries' long position.| Lifetime Brands vs. Bassett Furniture Industries | Lifetime Brands vs. Flexsteel Industries | Lifetime Brands vs. Hamilton Beach Brands | Lifetime Brands vs. Natuzzi SpA |
| FGI Industries vs. Bassett Furniture Industries | FGI Industries vs. Ethan Allen Interiors | FGI Industries vs. Natuzzi SpA | FGI Industries vs. Flexsteel Industries |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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