Correlation Between G-III Apparel and Makita
Can any of the company-specific risk be diversified away by investing in both G-III Apparel and Makita 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 Makita 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 Makita, you can compare the effects of market volatilities on G-III Apparel and Makita 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 Makita. Check out your portfolio center. Please also check ongoing floating volatility patterns of G-III Apparel and Makita.
Diversification Opportunities for G-III Apparel and Makita
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between G-III and Makita is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and Makita in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Makita 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 Makita. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Makita has no effect on the direction of G-III Apparel i.e., G-III Apparel and Makita go up and down completely randomly.
Pair Corralation between G-III Apparel and Makita
Assuming the 90 days trading horizon G III Apparel Group is expected to generate 0.9 times more return on investment than Makita. However, G III Apparel Group is 1.11 times less risky than Makita. It trades about 0.03 of its potential returns per unit of risk. Makita is currently generating about -0.09 per unit of risk. If you would invest 2,780 in G III Apparel Group on September 2, 2024 and sell it today you would earn a total of 20.00 from holding G III Apparel Group or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
G III Apparel Group vs. Makita
Performance |
| Timeline |
| G III Apparel |
| Makita |
G-III Apparel and Makita Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G-III Apparel and Makita
The main advantage of trading using opposite G-III Apparel and Makita positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G-III Apparel position performs unexpectedly, Makita 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 Makita will offset losses from the drop in Makita's long position.| G-III Apparel vs. ASURE SOFTWARE | G-III Apparel vs. Rogers Communications | G-III Apparel vs. AXWAY SOFTWARE EO | G-III Apparel vs. Chunghwa Telecom Co |
| Makita vs. MTI WIRELESS EDGE | Makita vs. Sumitomo Mitsui Construction | Makita vs. North American Construction | Makita vs. CENTURIA OFFICE REIT |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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