Correlation Between G-III Apparel and News
Can any of the company-specific risk be diversified away by investing in both G-III Apparel and News 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 News 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 News Corporation, you can compare the effects of market volatilities on G-III Apparel and News 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 News. Check out your portfolio center. Please also check ongoing floating volatility patterns of G-III Apparel and News.
Diversification Opportunities for G-III Apparel and News
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between G-III and News is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and News Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on News 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 News. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of News has no effect on the direction of G-III Apparel i.e., G-III Apparel and News go up and down completely randomly.
Pair Corralation between G-III Apparel and News
Assuming the 90 days horizon G-III Apparel is expected to generate 3.98 times less return on investment than News. In addition to that, G-III Apparel is 1.25 times more volatile than News Corporation. It trades about 0.08 of its total potential returns per unit of risk. News Corporation is currently generating about 0.38 per unit of volatility. If you would invest 2,620 in News Corporation on September 4, 2024 and sell it today you would earn a total of 380.00 from holding News Corporation or generate 14.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
G III Apparel Group vs. News Corp.
Performance |
| Timeline |
| G III Apparel |
| News |
G-III Apparel and News Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G-III Apparel and News
The main advantage of trading using opposite G-III Apparel and News positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G-III Apparel position performs unexpectedly, News 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 News will offset losses from the drop in News' long position.| G-III Apparel vs. H M Hennes | G-III Apparel vs. H M Hennes | G-III Apparel vs. VF Corporation | G-III Apparel vs. Bosideng International Holdings |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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