Correlation Between G-III Apparel and PENN NATL
Can any of the company-specific risk be diversified away by investing in both G-III Apparel and PENN NATL 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 PENN NATL 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 PENN NATL GAMING, you can compare the effects of market volatilities on G-III Apparel and PENN NATL 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 PENN NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of G-III Apparel and PENN NATL.
Diversification Opportunities for G-III Apparel and PENN NATL
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between G-III and PENN is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and PENN NATL GAMING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN NATL GAMING 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 PENN NATL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENN NATL GAMING has no effect on the direction of G-III Apparel i.e., G-III Apparel and PENN NATL go up and down completely randomly.
Pair Corralation between G-III Apparel and PENN NATL
Assuming the 90 days trading horizon G III Apparel Group is expected to under-perform the PENN NATL. But the stock apears to be less risky and, when comparing its historical volatility, G III Apparel Group is 1.78 times less risky than PENN NATL. The stock trades about -0.3 of its potential returns per unit of risk. The PENN NATL GAMING is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,769 in PENN NATL GAMING on October 20, 2024 and sell it today you would earn a total of 207.00 from holding PENN NATL GAMING or generate 11.7% 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. PENN NATL GAMING
Performance |
| Timeline |
| G III Apparel |
| PENN NATL GAMING |
G-III Apparel and PENN NATL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G-III Apparel and PENN NATL
The main advantage of trading using opposite G-III Apparel and PENN NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G-III Apparel position performs unexpectedly, PENN NATL 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 PENN NATL will offset losses from the drop in PENN NATL's long position.| G-III Apparel vs. Align Technology | G-III Apparel vs. COSMOSTEEL HLDGS | G-III Apparel vs. TOMBADOR IRON LTD | G-III Apparel vs. Mount Gibson Iron |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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