Correlation Between G-III Apparel and Insteel Industries
Can any of the company-specific risk be diversified away by investing in both G-III Apparel and Insteel Industries 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 Insteel Industries 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 Insteel Industries, you can compare the effects of market volatilities on G-III Apparel and Insteel Industries 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 Insteel Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of G-III Apparel and Insteel Industries.
Diversification Opportunities for G-III Apparel and Insteel Industries
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between G-III and Insteel is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and Insteel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insteel Industries 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 Insteel Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insteel Industries has no effect on the direction of G-III Apparel i.e., G-III Apparel and Insteel Industries go up and down completely randomly.
Pair Corralation between G-III Apparel and Insteel Industries
Assuming the 90 days trading horizon G III Apparel Group is expected to under-perform the Insteel Industries. But the stock apears to be less risky and, when comparing its historical volatility, G III Apparel Group is 1.24 times less risky than Insteel Industries. The stock trades about -0.04 of its potential returns per unit of risk. The Insteel Industries is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2,520 in Insteel Industries on August 31, 2024 and sell it today you would earn a total of 340.00 from holding Insteel Industries or generate 13.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
G III Apparel Group vs. Insteel Industries
Performance |
| Timeline |
| G III Apparel |
| Insteel Industries |
G-III Apparel and Insteel Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G-III Apparel and Insteel Industries
The main advantage of trading using opposite G-III Apparel and Insteel Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G-III Apparel position performs unexpectedly, Insteel Industries 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 Insteel Industries will offset losses from the drop in Insteel Industries' 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 |
| Insteel Industries vs. American Eagle Outfitters | Insteel Industries vs. PARKEN Sport Entertainment | Insteel Industries vs. Dairy Farm International | Insteel Industries vs. AM EAGLE 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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