Correlation Between G III and Hongkong
Can any of the company-specific risk be diversified away by investing in both G III and Hongkong 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 Hongkong 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 The Hongkong and, you can compare the effects of market volatilities on G III and Hongkong 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 Hongkong. Check out your portfolio center. Please also check ongoing floating volatility patterns of G III and Hongkong.
Diversification Opportunities for G III and Hongkong
Poor diversification
The 3 months correlation between GI4 and Hongkong is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and The Hongkong and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hongkong 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 Hongkong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hongkong has no effect on the direction of G III i.e., G III and Hongkong go up and down completely randomly.
Pair Corralation between G III and Hongkong
Assuming the 90 days trading horizon G III Apparel Group is expected to under-perform the Hongkong. In addition to that, G III is 2.12 times more volatile than The Hongkong and. It trades about -0.12 of its total potential returns per unit of risk. The Hongkong and is currently generating about -0.23 per unit of volatility. If you would invest 74.00 in The Hongkong and on November 7, 2024 and sell it today you would lose (4.00) from holding The Hongkong and or give up 5.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
G III Apparel Group vs. The Hongkong and
Performance |
| Timeline |
| G III Apparel |
| The Hongkong |
G III and Hongkong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G III and Hongkong
The main advantage of trading using opposite G III and Hongkong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G III position performs unexpectedly, Hongkong 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 Hongkong will offset losses from the drop in Hongkong's long position.| G III vs. Perseus Mining Limited | G III vs. DISTRICT METALS | G III vs. REVO INSURANCE SPA | G III vs. Harmony Gold Mining |
| Hongkong vs. Marriott International | Hongkong vs. Hilton Worldwide Holdings | Hongkong vs. H World Group | Hongkong vs. Hyatt Hotels |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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