Correlation Between NYSE Composite and FGI Industries
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and FGI Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and FGI Industries, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of FGI Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and FGI Industries.
Diversification Opportunities for NYSE Composite and FGI Industries
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and FGI is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and FGI Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FGI Industries and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and FGI Industries go up and down completely randomly.
Pair Corralation between NYSE Composite and FGI Industries
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.09 times more return on investment than FGI Industries. However, NYSE Composite is 10.56 times less risky than FGI Industries. It trades about 0.24 of its potential returns per unit of risk. FGI Industries is currently generating about -0.01 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 28, 2024 and sell it today you would earn a total of 67,069 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. FGI Industries
Performance |
| Timeline |
NYSE Composite and FGI Industries Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
FGI Industries
Pair trading matchups for FGI Industries
Pair Trading with NYSE Composite and FGI Industries
The main advantage of trading using opposite NYSE Composite and FGI Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| FGI Industries vs. Fundamental Global | FGI Industries vs. Yoshitsu Co Ltd | FGI Industries vs. Hour Loop | FGI Industries vs. Direct Digital Holdings |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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