Correlation Between G-III Apparel and SBI Insurance
Can any of the company-specific risk be diversified away by investing in both G-III Apparel and SBI Insurance 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 SBI Insurance 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 SBI Insurance Group, you can compare the effects of market volatilities on G-III Apparel and SBI Insurance 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 SBI Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of G-III Apparel and SBI Insurance.
Diversification Opportunities for G-III Apparel and SBI Insurance
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between G-III and SBI is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and SBI Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Insurance 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 SBI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Insurance Group has no effect on the direction of G-III Apparel i.e., G-III Apparel and SBI Insurance go up and down completely randomly.
Pair Corralation between G-III Apparel and SBI Insurance
Assuming the 90 days trading horizon G-III Apparel is expected to generate 1.08 times less return on investment than SBI Insurance. In addition to that, G-III Apparel is 1.56 times more volatile than SBI Insurance Group. It trades about 0.06 of its total potential returns per unit of risk. SBI Insurance Group is currently generating about 0.1 per unit of volatility. If you would invest 625.00 in SBI Insurance Group on October 11, 2024 and sell it today you would earn a total of 20.00 from holding SBI Insurance Group or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
G III Apparel Group vs. SBI Insurance Group
Performance |
| Timeline |
| G III Apparel |
| SBI Insurance Group |
G-III Apparel and SBI Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G-III Apparel and SBI Insurance
The main advantage of trading using opposite G-III Apparel and SBI Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G-III Apparel position performs unexpectedly, SBI Insurance 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 SBI Insurance will offset losses from the drop in SBI Insurance's long position.| G-III Apparel vs. Ribbon Communications | G-III Apparel vs. Ares Management Corp | G-III Apparel vs. CEOTRONICS | G-III Apparel vs. GMO Internet |
| SBI Insurance vs. Performance Food Group | SBI Insurance vs. PREMIER FOODS | SBI Insurance vs. G III Apparel Group | SBI Insurance vs. alstria office REIT AG |
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 Stocks Directory module to find actively traded stocks across global markets.
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