Correlation Between NEW MILLENNIUM and G III
Can any of the company-specific risk be diversified away by investing in both NEW MILLENNIUM 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 NEW MILLENNIUM and G III into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEW MILLENNIUM IRON and G III Apparel Group, you can compare the effects of market volatilities on NEW MILLENNIUM 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 NEW MILLENNIUM with a short position of G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEW MILLENNIUM and G III.
Diversification Opportunities for NEW MILLENNIUM and G III
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NEW and GI4 is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding NEW MILLENNIUM IRON 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 NEW MILLENNIUM 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 NEW MILLENNIUM IRON 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 NEW MILLENNIUM i.e., NEW MILLENNIUM and G III go up and down completely randomly.
Pair Corralation between NEW MILLENNIUM and G III
Assuming the 90 days trading horizon NEW MILLENNIUM is expected to generate 1.51 times less return on investment than G III. But when comparing it to its historical volatility, NEW MILLENNIUM IRON is 1.17 times less risky than G III. It trades about 0.05 of its potential returns per unit of risk. G III Apparel Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,730 in G III Apparel Group on October 30, 2024 and sell it today you would earn a total of 1,370 from holding G III Apparel Group or generate 79.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEW MILLENNIUM IRON vs. G III Apparel Group
Performance |
| Timeline |
| NEW MILLENNIUM IRON |
| G III Apparel |
NEW MILLENNIUM and G III Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEW MILLENNIUM and G III
The main advantage of trading using opposite NEW MILLENNIUM and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEW MILLENNIUM 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.| NEW MILLENNIUM vs. Charter Communications | NEW MILLENNIUM vs. Kingdee International Software | NEW MILLENNIUM vs. MAG SILVER | NEW MILLENNIUM vs. Aya Gold Silver |
| G III vs. Cardinal Health | G III vs. OPKO HEALTH | G III vs. Air Transport Services | G III vs. Fortescue Metals Group |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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