Correlation Between G-III Apparel and Autohome
Can any of the company-specific risk be diversified away by investing in both G-III Apparel and Autohome 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 Autohome 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 Autohome ADR, you can compare the effects of market volatilities on G-III Apparel and Autohome 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 Autohome. Check out your portfolio center. Please also check ongoing floating volatility patterns of G-III Apparel and Autohome.
Diversification Opportunities for G-III Apparel and Autohome
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between G-III and Autohome is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and Autohome ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome ADR 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 Autohome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autohome ADR has no effect on the direction of G-III Apparel i.e., G-III Apparel and Autohome go up and down completely randomly.
Pair Corralation between G-III Apparel and Autohome
Assuming the 90 days trading horizon G III Apparel Group is expected to under-perform the Autohome. But the stock apears to be less risky and, when comparing its historical volatility, G III Apparel Group is 1.74 times less risky than Autohome. The stock trades about -0.21 of its potential returns per unit of risk. The Autohome ADR is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 2,511 in Autohome ADR on October 17, 2024 and sell it today you would lose (71.00) from holding Autohome ADR or give up 2.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
G III Apparel Group vs. Autohome ADR
Performance |
| Timeline |
| G III Apparel |
| Autohome ADR |
G-III Apparel and Autohome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G-III Apparel and Autohome
The main advantage of trading using opposite G-III Apparel and Autohome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G-III Apparel position performs unexpectedly, Autohome 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 Autohome will offset losses from the drop in Autohome's long position.| G-III Apparel vs. United States Steel | G-III Apparel vs. ALGOMA STEEL GROUP | G-III Apparel vs. PT Steel Pipe | G-III Apparel vs. NEW MILLENNIUM IRON |
| Autohome vs. MEDICAL FACILITIES NEW | Autohome vs. SWISS WATER DECAFFCOFFEE | Autohome vs. GLOBUS MEDICAL A | Autohome vs. Merit Medical Systems |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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