Correlation Between Global E and Figs

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

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

Diversification Opportunities for Global E and Figs

-0.47

Correlation Coefficient

Global E  Figs

Very good diversification

The 3 months correlation between Global and Figs is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Global E Online and Figs Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figs Inc and Global E 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 Global E Online are associated (or correlated) with Figs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figs Inc has no effect on the direction of Global E i.e., Global E and Figs go up and down completely randomly.

Pair Corralation between Global E and Figs

Given the investment horizon of 90 days Global E Online is expected to generate 0.53 times more return on investment than Figs. However, Global E Online is 1.88 times less risky than Figs. It trades about 0.27 of its potential returns per unit of risk. Figs Inc is currently generating about -0.03 per unit of risk. If you would invest  3,442  in Global E Online on August 30, 2024 and sell it today you would earn a total of  1,744  from holding Global E Online or generate 50.67% return on investment over 90 days.

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

Global E Online  vs.  Figs Inc

Global E Online

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global E Online are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental drivers, Global E exhibited solid returns over the last few months and may actually be approaching a breakup point.

Figs Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Figs Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Global E and Figs

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

The idea behind Global E Online and Figs Inc 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.