Correlation Between Dow Jones and G III
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and G III into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and G III Apparel Group, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and G III.
Diversification Opportunities for Dow Jones and G III
Very good diversification
The 3 months correlation between Dow and GIII is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial 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 Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and G III go up and down completely randomly.
Pair Corralation between Dow Jones and G III
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.26 times more return on investment than G III. However, Dow Jones Industrial is 3.82 times less risky than G III. It trades about 0.2 of its potential returns per unit of risk. G III Apparel Group is currently generating about -0.07 per unit of risk. If you would invest 4,348,783 in Dow Jones Industrial on November 18, 2024 and sell it today you would earn a total of 105,825 from holding Dow Jones Industrial or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. G III Apparel Group
Performance |
| Timeline |
Dow Jones and G III Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
G III Apparel Group
Pair trading matchups for G III
Pair Trading with Dow Jones and G III
The main advantage of trading using opposite Dow Jones and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Palomar Holdings | Dow Jones vs. Mesa Air Group | Dow Jones vs. LATAM Airlines Group | Dow Jones vs. Unum Group |
| G III vs. Oxford Industries | G III vs. Ermenegildo Zegna NV | G III vs. Kontoor Brands | G III vs. Columbia Sportswear |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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