Correlation Between Natuzzi SpA and FGI Industries
Can any of the company-specific risk be diversified away by investing in both Natuzzi SpA 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 Natuzzi SpA and FGI Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natuzzi SpA and FGI Industries, you can compare the effects of market volatilities on Natuzzi SpA 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 Natuzzi SpA with a short position of FGI Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natuzzi SpA and FGI Industries.
Diversification Opportunities for Natuzzi SpA and FGI Industries
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Natuzzi and FGI is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Natuzzi SpA and FGI Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FGI Industries and Natuzzi SpA 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 Natuzzi SpA 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 Natuzzi SpA i.e., Natuzzi SpA and FGI Industries go up and down completely randomly.
Pair Corralation between Natuzzi SpA and FGI Industries
Considering the 90-day investment horizon Natuzzi SpA is expected to generate 0.8 times more return on investment than FGI Industries. However, Natuzzi SpA is 1.24 times less risky than FGI Industries. It trades about 0.01 of its potential returns per unit of risk. FGI Industries is currently generating about -0.03 per unit of risk. If you would invest 510.00 in Natuzzi SpA on January 11, 2025 and sell it today you would lose (91.00) from holding Natuzzi SpA or give up 17.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.34% |
| Values | Daily Returns |
Natuzzi SpA vs. FGI Industries
Performance |
| Timeline |
| Natuzzi SpA |
| FGI Industries |
Natuzzi SpA and FGI Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natuzzi SpA and FGI Industries
The main advantage of trading using opposite Natuzzi SpA and FGI Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natuzzi SpA 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.| Natuzzi SpA vs. Bassett Furniture Industries | Natuzzi SpA vs. Hooker Furniture | Natuzzi SpA vs. Flexsteel Industries | Natuzzi SpA vs. Ethan Allen Interiors |
| FGI Industries vs. SharkNinja, | FGI Industries vs. Viomi Technology ADR | FGI Industries vs. Energy Focu | 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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