Correlation Between Viomi Technology and FGI Industries

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

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

Diversification Opportunities for Viomi Technology and FGI Industries

-0.04

Correlation Coefficient

Viomi Technology  FGI Industries

Good diversification

The 3 months correlation between Viomi and FGI is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Viomi Technology ADR and FGI Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FGI Industries and Viomi Technology 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 Viomi Technology ADR 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 Viomi Technology i.e., Viomi Technology and FGI Industries go up and down completely randomly.

Pair Corralation between Viomi Technology and FGI Industries

Given the investment horizon of 90 days Viomi Technology ADR is expected to generate 1.93 times more return on investment than FGI Industries. However, Viomi Technology is 1.93 times more volatile than FGI Industries. It trades about 0.09 of its potential returns per unit of risk. FGI Industries is currently generating about 0.03 per unit of risk. If you would invest  146.00  in Viomi Technology ADR on December 26, 2024 and sell it today you would earn a total of  42.00  from holding Viomi Technology ADR or generate 28.77% return on investment over 90 days.

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

Viomi Technology ADR  vs.  FGI Industries

Viomi Technology ADR

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Viomi Technology ADR are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Viomi Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

FGI Industries

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FGI Industries are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical and fundamental indicators, FGI Industries may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Viomi Technology and FGI Industries

The main advantage of trading using opposite Viomi Technology and FGI Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viomi Technology 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 Viomi Technology ADR 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.