Correlation Between G-III APPAREL and ScanSource
Can any of the company-specific risk be diversified away by investing in both G-III APPAREL and ScanSource 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 G-III APPAREL and ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G III APPAREL GROUP and ScanSource, you can compare the effects of market volatilities on G-III APPAREL and ScanSource 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 G-III APPAREL with a short position of ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of G-III APPAREL and ScanSource.
Diversification Opportunities for G-III APPAREL and ScanSource
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between G-III and ScanSource is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding G III APPAREL GROUP and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and G-III APPAREL 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 G III APPAREL GROUP are associated (or correlated) with ScanSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanSource has no effect on the direction of G-III APPAREL i.e., G-III APPAREL and ScanSource go up and down completely randomly.
Pair Corralation between G-III APPAREL and ScanSource
Assuming the 90 days trading horizon G III APPAREL GROUP is expected to generate 1.46 times more return on investment than ScanSource. However, G-III APPAREL is 1.46 times more volatile than ScanSource. It trades about 0.05 of its potential returns per unit of risk. ScanSource is currently generating about 0.03 per unit of risk. If you would invest 1,420 in G III APPAREL GROUP on December 6, 2024 and sell it today you would earn a total of 940.00 from holding G III APPAREL GROUP or generate 66.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
G III APPAREL GROUP vs. ScanSource
Performance |
| Timeline |
| G III APPAREL |
| ScanSource |
G-III APPAREL and ScanSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G-III APPAREL and ScanSource
The main advantage of trading using opposite G-III APPAREL and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G-III APPAREL position performs unexpectedly, ScanSource 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 ScanSource will offset losses from the drop in ScanSource's long position.| G-III APPAREL vs. Tradegate AG Wertpapierhandelsbank | G-III APPAREL vs. QBE Insurance Group | G-III APPAREL vs. Tradeweb Markets | G-III APPAREL vs. GOME Retail Holdings |
| ScanSource vs. Tower Semiconductor | ScanSource vs. Q2M Managementberatung AG | ScanSource vs. ELMOS SEMICONDUCTOR | ScanSource vs. Kaufman Broad SA |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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