Correlation Between Orion Energy and FGI Industries
Can any of the company-specific risk be diversified away by investing in both Orion Energy 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 Orion Energy and FGI Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orion Energy Systems and FGI Industries, you can compare the effects of market volatilities on Orion Energy 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 Orion Energy with a short position of FGI Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orion Energy and FGI Industries.
Diversification Opportunities for Orion Energy and FGI Industries
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Orion and FGI is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Orion Energy Systems and FGI Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FGI Industries and Orion Energy 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 Orion Energy Systems 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 Orion Energy i.e., Orion Energy and FGI Industries go up and down completely randomly.
Pair Corralation between Orion Energy and FGI Industries
Given the investment horizon of 90 days Orion Energy Systems is expected to under-perform the FGI Industries. But the stock apears to be less risky and, when comparing its historical volatility, Orion Energy Systems is 2.53 times less risky than FGI Industries. The stock trades about -0.31 of its potential returns per unit of risk. The FGI Industries is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 87.00 in FGI Industries on August 28, 2024 and sell it today you would lose (6.00) from holding FGI Industries or give up 6.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orion Energy Systems vs. FGI Industries
Performance |
| Timeline |
| Orion Energy Systems |
| FGI Industries |
Orion Energy and FGI Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orion Energy and FGI Industries
The main advantage of trading using opposite Orion Energy and FGI Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orion Energy 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.| Orion Energy vs. Polar Power | Orion Energy vs. CBAK Energy Technology | Orion Energy vs. Pioneer Power Solutions | Orion Energy vs. Lightbridge Corp |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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