Correlation Between G III and Marks
Can any of the company-specific risk be diversified away by investing in both G III and Marks 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 Marks 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 Marks and Spencer, you can compare the effects of market volatilities on G III and Marks 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 Marks. Check out your portfolio center. Please also check ongoing floating volatility patterns of G III and Marks.
Diversification Opportunities for G III and Marks
Average diversification
The 3 months correlation between GI4 and Marks is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and Marks and Spencer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks and Spencer 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 Marks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks and Spencer has no effect on the direction of G III i.e., G III and Marks go up and down completely randomly.
Pair Corralation between G III and Marks
Assuming the 90 days trading horizon G III Apparel Group is expected to generate 0.49 times more return on investment than Marks. However, G III Apparel Group is 2.03 times less risky than Marks. It trades about -0.08 of its potential returns per unit of risk. Marks and Spencer is currently generating about -0.26 per unit of risk. If you would invest 3,100 in G III Apparel Group on October 29, 2024 and sell it today you would lose (80.00) from holding G III Apparel Group or give up 2.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
G III Apparel Group vs. Marks and Spencer
Performance |
| Timeline |
| G III Apparel |
| Marks and Spencer |
G III and Marks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G III and Marks
The main advantage of trading using opposite G III and Marks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G III position performs unexpectedly, Marks 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 Marks will offset losses from the drop in Marks' long position.| G III vs. CARDINAL HEALTH | G III vs. Calibre Mining Corp | G III vs. Universal Health Realty | G III vs. CVS Health |
| Marks vs. STRAYER EDUCATION | Marks vs. Wayside Technology Group | Marks vs. G III Apparel Group | Marks vs. Ribbon Communications |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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