Correlation Between G-III Apparel and ASPEN TECHINC
Can any of the company-specific risk be diversified away by investing in both G-III Apparel and ASPEN TECHINC 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 ASPEN TECHINC 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 ASPEN TECHINC DL, you can compare the effects of market volatilities on G-III Apparel and ASPEN TECHINC 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 ASPEN TECHINC. Check out your portfolio center. Please also check ongoing floating volatility patterns of G-III Apparel and ASPEN TECHINC.
Diversification Opportunities for G-III Apparel and ASPEN TECHINC
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between G-III and ASPEN is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and ASPEN TECHINC DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASPEN TECHINC DL 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 ASPEN TECHINC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASPEN TECHINC DL has no effect on the direction of G-III Apparel i.e., G-III Apparel and ASPEN TECHINC go up and down completely randomly.
Pair Corralation between G-III Apparel and ASPEN TECHINC
Assuming the 90 days trading horizon G III Apparel Group is expected to generate 1.39 times more return on investment than ASPEN TECHINC. However, G-III Apparel is 1.39 times more volatile than ASPEN TECHINC DL. It trades about 0.06 of its potential returns per unit of risk. ASPEN TECHINC DL is currently generating about 0.04 per unit of risk. If you would invest 1,460 in G III Apparel Group on October 17, 2024 and sell it today you would earn a total of 1,600 from holding G III Apparel Group or generate 109.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
G III Apparel Group vs. ASPEN TECHINC DL
Performance |
| Timeline |
| G III Apparel |
| ASPEN TECHINC DL |
G-III Apparel and ASPEN TECHINC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G-III Apparel and ASPEN TECHINC
The main advantage of trading using opposite G-III Apparel and ASPEN TECHINC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G-III Apparel position performs unexpectedly, ASPEN TECHINC 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 ASPEN TECHINC will offset losses from the drop in ASPEN TECHINC's long position.| G-III Apparel vs. United States Steel | G-III Apparel vs. ALGOMA STEEL GROUP | G-III Apparel vs. PT Steel Pipe | G-III Apparel vs. NEW MILLENNIUM IRON |
| ASPEN TECHINC vs. G III Apparel Group | ASPEN TECHINC vs. AM EAGLE OUTFITTERS | ASPEN TECHINC vs. BJs Wholesale Club | ASPEN TECHINC vs. Ross Stores |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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