Correlation Between G III and Hapag Lloyd
Can any of the company-specific risk be diversified away by investing in both G III and Hapag Lloyd 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 Hapag Lloyd 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 Hapag Lloyd AG, you can compare the effects of market volatilities on G III and Hapag Lloyd 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 Hapag Lloyd. Check out your portfolio center. Please also check ongoing floating volatility patterns of G III and Hapag Lloyd.
Diversification Opportunities for G III and Hapag Lloyd
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GI4 and Hapag is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and Hapag Lloyd AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hapag Lloyd AG 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 Hapag Lloyd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hapag Lloyd AG has no effect on the direction of G III i.e., G III and Hapag Lloyd go up and down completely randomly.
Pair Corralation between G III and Hapag Lloyd
Assuming the 90 days trading horizon G III Apparel Group is expected to generate 0.59 times more return on investment than Hapag Lloyd. However, G III Apparel Group is 1.7 times less risky than Hapag Lloyd. It trades about -0.04 of its potential returns per unit of risk. Hapag Lloyd AG is currently generating about -0.09 per unit of risk. If you would invest 2,860 in G III Apparel Group on August 30, 2024 and sell it today you would lose (60.00) from holding G III Apparel Group or give up 2.1% of portfolio value 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. Hapag Lloyd AG
Performance |
| Timeline |
| G III Apparel |
| Hapag Lloyd AG |
G III and Hapag Lloyd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G III and Hapag Lloyd
The main advantage of trading using opposite G III and Hapag Lloyd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G III position performs unexpectedly, Hapag Lloyd 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 Hapag Lloyd will offset losses from the drop in Hapag Lloyd's long position.The idea behind G III Apparel Group and Hapag Lloyd AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hapag Lloyd vs. TYSON FOODS A | Hapag Lloyd vs. Cal Maine Foods | Hapag Lloyd vs. MOVIE GAMES SA | Hapag Lloyd vs. G III Apparel Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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