Correlation Between G III and Nippon Paint
Can any of the company-specific risk be diversified away by investing in both G III and Nippon Paint 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 Nippon Paint 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 Nippon Paint Holdings, you can compare the effects of market volatilities on G III and Nippon Paint 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 Nippon Paint. Check out your portfolio center. Please also check ongoing floating volatility patterns of G III and Nippon Paint.
Diversification Opportunities for G III and Nippon Paint
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between GIII and Nippon is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and Nippon Paint Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Paint Holdings 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 Nippon Paint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Paint Holdings has no effect on the direction of G III i.e., G III and Nippon Paint go up and down completely randomly.
Pair Corralation between G III and Nippon Paint
Given the investment horizon of 90 days G III Apparel Group is expected to generate 0.54 times more return on investment than Nippon Paint. However, G III Apparel Group is 1.85 times less risky than Nippon Paint. It trades about 0.1 of its potential returns per unit of risk. Nippon Paint Holdings is currently generating about -0.06 per unit of risk. If you would invest 3,202 in G III Apparel Group on November 2, 2024 and sell it today you would earn a total of 86.00 from holding G III Apparel Group or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
G III Apparel Group vs. Nippon Paint Holdings
Performance |
| Timeline |
| G III Apparel |
| Nippon Paint Holdings |
G III and Nippon Paint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G III and Nippon Paint
The main advantage of trading using opposite G III and Nippon Paint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G III position performs unexpectedly, Nippon Paint 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 Nippon Paint will offset losses from the drop in Nippon Paint's long position.| G III vs. Oxford Industries | G III vs. Ermenegildo Zegna NV | G III vs. Kontoor Brands | G III vs. Columbia Sportswear |
| Nippon Paint vs. KeyCorp | Nippon Paint vs. KNOT Offshore Partners | Nippon Paint vs. Scholastic | Nippon Paint vs. East West Bancorp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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