Correlation Between Foot Locker and G III
Can any of the company-specific risk be diversified away by investing in both Foot Locker 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 Foot Locker and G III into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foot Locker and G III Apparel Group, you can compare the effects of market volatilities on Foot Locker 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 Foot Locker with a short position of G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foot Locker and G III.
Diversification Opportunities for Foot Locker and G III
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Foot and GIII is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Foot Locker 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 Foot Locker 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 Foot Locker 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 Foot Locker i.e., Foot Locker and G III go up and down completely randomly.
Pair Corralation between Foot Locker and G III
Allowing for the 90-day total investment horizon Foot Locker is expected to under-perform the G III. In addition to that, Foot Locker is 1.07 times more volatile than G III Apparel Group. It trades about -0.12 of its total potential returns per unit of risk. G III Apparel Group is currently generating about 0.01 per unit of volatility. If you would invest 3,005 in G III Apparel Group on August 26, 2024 and sell it today you would earn a total of 6.00 from holding G III Apparel Group or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Foot Locker vs. G III Apparel Group
Performance |
| Timeline |
| Foot Locker |
| G III Apparel |
Foot Locker and G III Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foot Locker and G III
The main advantage of trading using opposite Foot Locker and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foot Locker 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.| Foot Locker vs. Abercrombie Fitch | Foot Locker vs. Urban Outfitters | Foot Locker vs. Childrens Place | Foot Locker vs. American Eagle Outfitters |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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