Correlation Between G III and FAST RETAIL
Can any of the company-specific risk be diversified away by investing in both G III and FAST RETAIL 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 and FAST RETAIL 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 FAST RETAIL ADR, you can compare the effects of market volatilities on G III and FAST RETAIL 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 with a short position of FAST RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of G III and FAST RETAIL.
Diversification Opportunities for G III and FAST RETAIL
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GI4 and FAST is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and FAST RETAIL ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAST RETAIL ADR and G III 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 FAST RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAST RETAIL ADR has no effect on the direction of G III i.e., G III and FAST RETAIL go up and down completely randomly.
Pair Corralation between G III and FAST RETAIL
Assuming the 90 days horizon G III Apparel Group is expected to generate 1.43 times more return on investment than FAST RETAIL. However, G III is 1.43 times more volatile than FAST RETAIL ADR. It trades about 0.06 of its potential returns per unit of risk. FAST RETAIL ADR is currently generating about 0.09 per unit of risk. If you would invest 1,900 in G III Apparel Group on September 12, 2024 and sell it today you would earn a total of 1,060 from holding G III Apparel Group or generate 55.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
G III Apparel Group vs. FAST RETAIL ADR
Performance |
| Timeline |
| G III Apparel |
| FAST RETAIL ADR |
G III and FAST RETAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G III and FAST RETAIL
The main advantage of trading using opposite G III and FAST RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G III position performs unexpectedly, FAST RETAIL 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 FAST RETAIL will offset losses from the drop in FAST RETAIL's long position.| G III vs. Strategic Education | G III vs. Magic Software Enterprises | G III vs. IDP EDUCATION LTD | G III vs. TAL Education Group |
| FAST RETAIL vs. CCC SA | FAST RETAIL vs. AOYAMA TRADING | FAST RETAIL vs. Superior Plus Corp | FAST RETAIL vs. SIVERS SEMICONDUCTORS AB |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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