Correlation Between Apple and G-III APPAREL
Can any of the company-specific risk be diversified away by investing in both Apple and G-III APPAREL 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 Apple and G-III APPAREL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and G III APPAREL GROUP, you can compare the effects of market volatilities on Apple and G-III APPAREL 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 Apple with a short position of G-III APPAREL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and G-III APPAREL.
Diversification Opportunities for Apple and G-III APPAREL
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Apple and G-III is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc 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 Apple 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 Apple Inc are associated (or correlated) with G-III APPAREL. 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 Apple i.e., Apple and G-III APPAREL go up and down completely randomly.
Pair Corralation between Apple and G-III APPAREL
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.5 times more return on investment than G-III APPAREL. However, Apple Inc is 2.0 times less risky than G-III APPAREL. It trades about 0.1 of its potential returns per unit of risk. G III APPAREL GROUP is currently generating about 0.0 per unit of risk. If you would invest 16,614 in Apple Inc on August 25, 2024 and sell it today you would earn a total of 5,431 from holding Apple Inc or generate 32.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. G III APPAREL GROUP
Performance |
| Timeline |
| Apple Inc |
| G III APPAREL |
Apple and G-III APPAREL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and G-III APPAREL
The main advantage of trading using opposite Apple and G-III APPAREL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, G-III APPAREL 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 APPAREL will offset losses from the drop in G-III APPAREL's long position.| Apple vs. AWILCO DRILLING PLC | Apple vs. NIPPON STEEL SPADR | Apple vs. GEELY AUTOMOBILE | Apple vs. LEGACY IRON ORE |
| G-III APPAREL vs. Apple Inc | G-III APPAREL vs. Apple Inc | G-III APPAREL vs. Apple Inc | G-III APPAREL vs. Apple Inc |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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