Correlation Between G-III Apparel and CARSALESCOM
Can any of the company-specific risk be diversified away by investing in both G-III Apparel and CARSALESCOM 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 CARSALESCOM 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 CARSALESCOM, you can compare the effects of market volatilities on G-III Apparel and CARSALESCOM 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 CARSALESCOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of G-III Apparel and CARSALESCOM.
Diversification Opportunities for G-III Apparel and CARSALESCOM
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between G-III and CARSALESCOM is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and CARSALESCOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARSALESCOM 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 CARSALESCOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARSALESCOM has no effect on the direction of G-III Apparel i.e., G-III Apparel and CARSALESCOM go up and down completely randomly.
Pair Corralation between G-III Apparel and CARSALESCOM
Assuming the 90 days trading horizon G III Apparel Group is expected to generate 2.01 times more return on investment than CARSALESCOM. However, G-III Apparel is 2.01 times more volatile than CARSALESCOM. It trades about 0.06 of its potential returns per unit of risk. CARSALESCOM is currently generating about -0.02 per unit of risk. If you would invest 3,020 in G III Apparel Group on October 11, 2024 and sell it today you would earn a total of 80.00 from holding G III Apparel Group or generate 2.65% 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. CARSALESCOM
Performance |
| Timeline |
| G III Apparel |
| CARSALESCOM |
G-III Apparel and CARSALESCOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G-III Apparel and CARSALESCOM
The main advantage of trading using opposite G-III Apparel and CARSALESCOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G-III Apparel position performs unexpectedly, CARSALESCOM 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 CARSALESCOM will offset losses from the drop in CARSALESCOM's long position.| G-III Apparel vs. Ribbon Communications | G-III Apparel vs. Ares Management Corp | G-III Apparel vs. CEOTRONICS | G-III Apparel vs. GMO Internet |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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