Correlation Between Gaming and G III
Can any of the company-specific risk be diversified away by investing in both Gaming and G III 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 Gaming and G III into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaming and Leisure and G III Apparel Group, you can compare the effects of market volatilities on Gaming and G III 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 Gaming with a short position of G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming and G III.
Diversification Opportunities for Gaming and G III
Very weak diversification
The 3 months correlation between Gaming and GI4 is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Gaming and Leisure and G III Apparel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G III Apparel and Gaming 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 Gaming and Leisure are associated (or correlated) with G III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G III Apparel has no effect on the direction of Gaming i.e., Gaming and G III go up and down completely randomly.
Pair Corralation between Gaming and G III
Assuming the 90 days horizon Gaming is expected to generate 4.16 times less return on investment than G III. But when comparing it to its historical volatility, Gaming and Leisure is 3.33 times less risky than G III. It trades about 0.18 of its potential returns per unit of risk. G III Apparel Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,880 in G III Apparel Group on September 12, 2024 and sell it today you would earn a total of 460.00 from holding G III Apparel Group or generate 15.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Gaming and Leisure vs. G III Apparel Group
Performance |
| Timeline |
| Gaming and Leisure |
| G III Apparel |
Gaming and G III Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaming and G III
The main advantage of trading using opposite Gaming and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming position performs unexpectedly, G III 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 G III will offset losses from the drop in G III's long position.| Gaming vs. CVS Health | Gaming vs. Mitsui Chemicals | Gaming vs. YOOMA WELLNESS INC | Gaming vs. SHIP HEALTHCARE HLDGINC |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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