Correlation Between G III and PICKN PAY
Can any of the company-specific risk be diversified away by investing in both G III and PICKN PAY 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 PICKN PAY 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 PICKN PAY STORES, you can compare the effects of market volatilities on G III and PICKN PAY 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 PICKN PAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of G III and PICKN PAY.
Diversification Opportunities for G III and PICKN PAY
Modest diversification
The 3 months correlation between GI4 and PICKN is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and PICKN PAY STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICKN PAY STORES 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 PICKN PAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICKN PAY STORES has no effect on the direction of G III i.e., G III and PICKN PAY go up and down completely randomly.
Pair Corralation between G III and PICKN PAY
Assuming the 90 days trading horizon G III is expected to generate 1.51 times less return on investment than PICKN PAY. In addition to that, G III is 1.43 times more volatile than PICKN PAY STORES. It trades about 0.19 of its total potential returns per unit of risk. PICKN PAY STORES is currently generating about 0.41 per unit of volatility. If you would invest 129.00 in PICKN PAY STORES on September 14, 2024 and sell it today you would earn a total of 28.00 from holding PICKN PAY STORES or generate 21.71% return on investment 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. PICKN PAY STORES
Performance |
| Timeline |
| G III Apparel |
| PICKN PAY STORES |
G III and PICKN PAY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G III and PICKN PAY
The main advantage of trading using opposite G III and PICKN PAY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G III position performs unexpectedly, PICKN PAY 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 PICKN PAY will offset losses from the drop in PICKN PAY's long position.| G III vs. Iridium Communications | G III vs. SBA Communications Corp | G III vs. Singapore Telecommunications Limited | G III vs. Highlight Communications AG |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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