Correlation Between G III and CarsalesCom
Can any of the company-specific risk be diversified away by investing in both G III 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 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 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 with a short position of CarsalesCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of G III and CarsalesCom.
Diversification Opportunities for G III and CarsalesCom
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GI4 and CarsalesCom is -0.35. 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 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 i.e., G III and CarsalesCom go up and down completely randomly.
Pair Corralation between G III and CarsalesCom
Assuming the 90 days trading horizon G III Apparel Group is expected to under-perform the CarsalesCom. But the stock apears to be less risky and, when comparing its historical volatility, G III Apparel Group is 1.12 times less risky than CarsalesCom. The stock trades about -0.08 of its potential returns per unit of risk. The CarsalesCom is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,180 in CarsalesCom on October 29, 2024 and sell it today you would earn a total of 200.00 from holding CarsalesCom or generate 9.17% 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. CarsalesCom
Performance |
| Timeline |
| G III Apparel |
| CarsalesCom |
G III and CarsalesCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G III and CarsalesCom
The main advantage of trading using opposite G III and CarsalesCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G III 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 vs. CARDINAL HEALTH | G III vs. Calibre Mining Corp | G III vs. Universal Health Realty | G III vs. CVS Health |
| CarsalesCom vs. Global Ship Lease | CarsalesCom vs. UNIVMUSIC GRPADR050 | CarsalesCom vs. SINGAPORE AIRLINES | CarsalesCom vs. Gol Intelligent Airlines |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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