Correlation Between G-III Apparel and China BlueChemical
Can any of the company-specific risk be diversified away by investing in both G-III Apparel and China BlueChemical 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 China BlueChemical 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 China BlueChemical, you can compare the effects of market volatilities on G-III Apparel and China BlueChemical 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 China BlueChemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of G-III Apparel and China BlueChemical.
Diversification Opportunities for G-III Apparel and China BlueChemical
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between G-III and China is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and China BlueChemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China BlueChemical 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 China BlueChemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China BlueChemical has no effect on the direction of G-III Apparel i.e., G-III Apparel and China BlueChemical go up and down completely randomly.
Pair Corralation between G-III Apparel and China BlueChemical
Assuming the 90 days trading horizon G III Apparel Group is expected to generate 0.85 times more return on investment than China BlueChemical. However, G III Apparel Group is 1.17 times less risky than China BlueChemical. It trades about 0.06 of its potential returns per unit of risk. China BlueChemical is currently generating about 0.02 per unit of risk. If you would invest 1,380 in G III Apparel Group on August 31, 2024 and sell it today you would earn a total of 1,420 from holding G III Apparel Group or generate 102.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
G III Apparel Group vs. China BlueChemical
Performance |
| Timeline |
| G III Apparel |
| China BlueChemical |
G-III Apparel and China BlueChemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G-III Apparel and China BlueChemical
The main advantage of trading using opposite G-III Apparel and China BlueChemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G-III Apparel position performs unexpectedly, China BlueChemical 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 China BlueChemical will offset losses from the drop in China BlueChemical'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 |
| China BlueChemical vs. Dalata Hotel Group | China BlueChemical vs. HANOVER INSURANCE | China BlueChemical vs. The Hanover Insurance | China BlueChemical vs. Host Hotels Resorts |
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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