Correlation Between Imperium Group and FGI Industries

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

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

Diversification Opportunities for Imperium Group and FGI Industries

0.74

Correlation Coefficient

Imperium Group  FGI Industries

Poor diversification

The 3 months correlation between Imperium and FGI is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Imperium Group Global and FGI Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FGI Industries and Imperium Group 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 Imperium Group Global 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 Imperium Group i.e., Imperium Group and FGI Industries go up and down completely randomly.

Pair Corralation between Imperium Group and FGI Industries

Assuming the 90 days horizon Imperium Group Global is expected to generate 2.77 times more return on investment than FGI Industries. However, Imperium Group is 2.77 times more volatile than FGI Industries. It trades about 0.06 of its potential returns per unit of risk. FGI Industries is currently generating about -0.02 per unit of risk. If you would invest  65.00  in Imperium Group Global on September 4, 2024 and sell it today you would lose (18.00) from holding Imperium Group Global or give up 27.69% of portfolio value over 90 days.

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

Imperium Group Global  vs.  FGI Industries

Imperium Group Global

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Imperium Group Global are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, Imperium Group reported solid returns over the last few months and may actually be approaching a breakup point.

FGI Industries

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FGI Industries are ranked lower than 3 (%) 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.

Pair Trading with Imperium Group and FGI Industries

The main advantage of trading using opposite Imperium Group and FGI Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imperium Group 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.

The idea behind Imperium Group Global and FGI Industries 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .