Correlation Between G-III Apparel and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both G-III Apparel and Hollywood Bowl 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 Hollywood Bowl 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 Hollywood Bowl Group, you can compare the effects of market volatilities on G-III Apparel and Hollywood Bowl 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 Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of G-III Apparel and Hollywood Bowl.
Diversification Opportunities for G-III Apparel and Hollywood Bowl
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between G-III and Hollywood is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and Hollywood Bowl Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollywood Bowl Group 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 Hollywood Bowl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollywood Bowl Group has no effect on the direction of G-III Apparel i.e., G-III Apparel and Hollywood Bowl go up and down completely randomly.
Pair Corralation between G-III Apparel and Hollywood Bowl
Assuming the 90 days trading horizon G III Apparel Group is expected to generate 1.56 times more return on investment than Hollywood Bowl. However, G-III Apparel is 1.56 times more volatile than Hollywood Bowl Group. It trades about 0.05 of its potential returns per unit of risk. Hollywood Bowl Group is currently generating about 0.04 per unit of risk. If you would invest 1,850 in G III Apparel Group on August 31, 2024 and sell it today you would earn a total of 950.00 from holding G III Apparel Group or generate 51.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
G III Apparel Group vs. Hollywood Bowl Group
Performance |
| Timeline |
| G III Apparel |
| Hollywood Bowl Group |
G-III Apparel and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G-III Apparel and Hollywood Bowl
The main advantage of trading using opposite G-III Apparel and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G-III Apparel position performs unexpectedly, Hollywood Bowl 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 Hollywood Bowl will offset losses from the drop in Hollywood Bowl's long position.| G-III Apparel vs. Apple Inc | G-III Apparel vs. Apple Inc | G-III Apparel vs. Apple Inc | G-III Apparel vs. Apple Inc |
| Hollywood Bowl vs. MIRAMAR HOTEL INV | Hollywood Bowl vs. INTERCONT HOTELS | Hollywood Bowl vs. Summit Hotel Properties | Hollywood Bowl vs. NXP Semiconductors NV |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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