Correlation Between FGI Industries and Lifetime Brands

Can any of the company-specific risk be diversified away by investing in both FGI Industries and Lifetime Brands 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 FGI Industries and Lifetime Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FGI Industries and Lifetime Brands, you can compare the effects of market volatilities on FGI Industries and Lifetime Brands 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 FGI Industries with a short position of Lifetime Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of FGI Industries and Lifetime Brands.

Diversification Opportunities for FGI Industries and Lifetime Brands

-0.04

Correlation Coefficient

FGI Industries  Lifetime Brands

Good diversification

The 3 months correlation between FGI and Lifetime is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding FGI Industries and Lifetime Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifetime Brands and FGI Industries 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 FGI Industries are associated (or correlated) with Lifetime Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifetime Brands has no effect on the direction of FGI Industries i.e., FGI Industries and Lifetime Brands go up and down completely randomly.

Pair Corralation between FGI Industries and Lifetime Brands

Considering the 90-day investment horizon FGI Industries is expected to generate 1.13 times more return on investment than Lifetime Brands. However, FGI Industries is 1.13 times more volatile than Lifetime Brands. It trades about 0.06 of its potential returns per unit of risk. Lifetime Brands is currently generating about -0.02 per unit of risk. If you would invest  80.00  in FGI Industries on December 28, 2024 and sell it today you would earn a total of  8.00  from holding FGI Industries or generate 10.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

FGI Industries  vs.  Lifetime Brands

FGI Industries

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FGI Industries are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical and fundamental indicators, FGI Industries demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Lifetime Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lifetime Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Lifetime Brands is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with FGI Industries and Lifetime Brands

The main advantage of trading using opposite FGI Industries and Lifetime Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FGI Industries position performs unexpectedly, Lifetime Brands 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 Lifetime Brands will offset losses from the drop in Lifetime Brands' long position.

The idea behind FGI Industries and Lifetime Brands pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.