Correlation Between G-III Apparel and Commonwealth Bank
Can any of the company-specific risk be diversified away by investing in both G-III Apparel and Commonwealth Bank 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 Commonwealth Bank 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 Commonwealth Bank of, you can compare the effects of market volatilities on G-III Apparel and Commonwealth Bank 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 Commonwealth Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of G-III Apparel and Commonwealth Bank.
Diversification Opportunities for G-III Apparel and Commonwealth Bank
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between G-III and Commonwealth is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and Commonwealth Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Bank 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 Commonwealth Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commonwealth Bank has no effect on the direction of G-III Apparel i.e., G-III Apparel and Commonwealth Bank go up and down completely randomly.
Pair Corralation between G-III Apparel and Commonwealth Bank
Assuming the 90 days trading horizon G-III Apparel is expected to generate 1.72 times less return on investment than Commonwealth Bank. In addition to that, G-III Apparel is 2.21 times more volatile than Commonwealth Bank of. It trades about 0.03 of its total potential returns per unit of risk. Commonwealth Bank of is currently generating about 0.11 per unit of volatility. If you would invest 6,499 in Commonwealth Bank of on October 18, 2024 and sell it today you would earn a total of 2,745 from holding Commonwealth Bank of or generate 42.24% 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. Commonwealth Bank of
Performance |
| Timeline |
| G III Apparel |
| Commonwealth Bank |
G-III Apparel and Commonwealth Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G-III Apparel and Commonwealth Bank
The main advantage of trading using opposite G-III Apparel and Commonwealth Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G-III Apparel position performs unexpectedly, Commonwealth Bank 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 Commonwealth Bank will offset losses from the drop in Commonwealth Bank'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 |
| Commonwealth Bank vs. AM EAGLE OUTFITTERS | Commonwealth Bank vs. G III Apparel Group | Commonwealth Bank vs. CEOTRONICS | Commonwealth Bank vs. URBAN OUTFITTERS |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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