Correlation Between G III and Skechers USA
Can any of the company-specific risk be diversified away by investing in both G III and Skechers USA 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 Skechers USA 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 Skechers USA, you can compare the effects of market volatilities on G III and Skechers USA 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 Skechers USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of G III and Skechers USA.
Diversification Opportunities for G III and Skechers USA
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GIII and Skechers is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and Skechers USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skechers USA 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 Skechers USA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skechers USA has no effect on the direction of G III i.e., G III and Skechers USA go up and down completely randomly.
Pair Corralation between G III and Skechers USA
Given the investment horizon of 90 days G III Apparel Group is expected to under-perform the Skechers USA. In addition to that, G III is 1.41 times more volatile than Skechers USA. It trades about -0.2 of its total potential returns per unit of risk. Skechers USA is currently generating about 0.17 per unit of volatility. If you would invest 6,765 in Skechers USA on October 21, 2024 and sell it today you would earn a total of 231.00 from holding Skechers USA or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
G III Apparel Group vs. Skechers USA
Performance |
| Timeline |
| G III Apparel |
| Skechers USA |
G III and Skechers USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G III and Skechers USA
The main advantage of trading using opposite G III and Skechers USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G III position performs unexpectedly, Skechers USA 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 Skechers USA will offset losses from the drop in Skechers USA's long position.| G III vs. Oxford Industries | G III vs. Ermenegildo Zegna NV | G III vs. Kontoor Brands | G III vs. Columbia Sportswear |
| Skechers USA vs. Crocs Inc | Skechers USA vs. On Holding | Skechers USA vs. Nike Inc | Skechers USA vs. Designer Brands |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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