Correlation Between G III and LIFE +
Can any of the company-specific risk be diversified away by investing in both G III and LIFE + 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 LIFE + 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 LIFE BANC SPLIT, you can compare the effects of market volatilities on G III and LIFE + 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 LIFE +. Check out your portfolio center. Please also check ongoing floating volatility patterns of G III and LIFE +.
Diversification Opportunities for G III and LIFE +
Average diversification
The 3 months correlation between GI4 and LIFE is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and LIFE BANC SPLIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFE BANC SPLIT 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 LIFE +. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFE BANC SPLIT has no effect on the direction of G III i.e., G III and LIFE + go up and down completely randomly.
Pair Corralation between G III and LIFE +
Assuming the 90 days trading horizon G III Apparel Group is expected to under-perform the LIFE +. But the stock apears to be less risky and, when comparing its historical volatility, G III Apparel Group is 1.5 times less risky than LIFE +. The stock trades about -0.29 of its potential returns per unit of risk. The LIFE BANC SPLIT is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 595.00 in LIFE BANC SPLIT on November 28, 2024 and sell it today you would lose (30.00) from holding LIFE BANC SPLIT or give up 5.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
G III Apparel Group vs. LIFE BANC SPLIT
Performance |
| Timeline |
| G III Apparel |
| LIFE BANC SPLIT |
G III and LIFE + Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G III and LIFE +
The main advantage of trading using opposite G III and LIFE + positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G III position performs unexpectedly, LIFE + 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 LIFE + will offset losses from the drop in LIFE +'s long position.| G III vs. Tencent Music Entertainment | G III vs. ZINC MEDIA GR | G III vs. CODERE ONLINE LUX | G III vs. CARSALESCOM |
| LIFE + vs. INTERSHOP Communications Aktiengesellschaft | LIFE + vs. Coeur Mining | LIFE + vs. Mobilezone Holding AG | LIFE + vs. Tower One Wireless |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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