Correlation Between G III and J Long
Can any of the company-specific risk be diversified away by investing in both G III and J Long 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 J Long 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 J Long Group Limited, you can compare the effects of market volatilities on G III and J Long 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 J Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of G III and J Long.
Diversification Opportunities for G III and J Long
Good diversification
The 3 months correlation between GIII and J Long is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and J Long Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Long Group 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 J Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Long Group has no effect on the direction of G III i.e., G III and J Long go up and down completely randomly.
Pair Corralation between G III and J Long
Given the investment horizon of 90 days G III Apparel Group is expected to generate 0.4 times more return on investment than J Long. However, G III Apparel Group is 2.52 times less risky than J Long. It trades about 0.2 of its potential returns per unit of risk. J Long Group Limited is currently generating about -0.18 per unit of risk. If you would invest 3,127 in G III Apparel Group on September 13, 2024 and sell it today you would earn a total of 394.00 from holding G III Apparel Group or generate 12.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
G III Apparel Group vs. J Long Group Limited
Performance |
| Timeline |
| G III Apparel |
| J Long Group |
G III and J Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G III and J Long
The main advantage of trading using opposite G III and J Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G III position performs unexpectedly, J Long 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 J Long will offset losses from the drop in J Long's long position.| G III vs. Oxford Industries | G III vs. Ermenegildo Zegna NV | G III vs. Kontoor Brands | G III vs. Columbia Sportswear |
| J Long vs. Centessa Pharmaceuticals PLC | J Long vs. Direct Line Insurance | J Long vs. enVVeno Medical Corp | J Long vs. GoHealth |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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