Correlation Between Accent Resources and G III
Can any of the company-specific risk be diversified away by investing in both Accent Resources 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 Accent Resources and G III into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accent Resources NL and G III Apparel Group, you can compare the effects of market volatilities on Accent Resources 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 Accent Resources with a short position of G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accent Resources and G III.
Diversification Opportunities for Accent Resources and G III
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Accent and GI4 is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Accent Resources NL 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 Accent Resources 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 Accent Resources NL 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 Accent Resources i.e., Accent Resources and G III go up and down completely randomly.
Pair Corralation between Accent Resources and G III
Assuming the 90 days horizon Accent Resources NL is expected to generate 39.84 times more return on investment than G III. However, Accent Resources is 39.84 times more volatile than G III Apparel Group. It trades about 0.17 of its potential returns per unit of risk. G III Apparel Group is currently generating about 0.06 per unit of risk. If you would invest 0.20 in Accent Resources NL on September 5, 2024 and sell it today you would earn a total of 1.60 from holding Accent Resources NL or generate 800.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accent Resources NL vs. G III Apparel Group
Performance |
| Timeline |
| Accent Resources |
| G III Apparel |
Accent Resources and G III Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accent Resources and G III
The main advantage of trading using opposite Accent Resources and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accent Resources 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.| Accent Resources vs. G III Apparel Group | Accent Resources vs. American Eagle Outfitters | Accent Resources vs. Entravision Communications | Accent Resources vs. Gamma Communications plc |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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