Correlation Between G III and Ermenegildo Zegna
Can any of the company-specific risk be diversified away by investing in both G III and Ermenegildo Zegna 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 Ermenegildo Zegna 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 Ermenegildo Zegna NV, you can compare the effects of market volatilities on G III and Ermenegildo Zegna 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 Ermenegildo Zegna. Check out your portfolio center. Please also check ongoing floating volatility patterns of G III and Ermenegildo Zegna.
Diversification Opportunities for G III and Ermenegildo Zegna
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GIII and Ermenegildo is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and Ermenegildo Zegna NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ermenegildo Zegna 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 Ermenegildo Zegna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ermenegildo Zegna has no effect on the direction of G III i.e., G III and Ermenegildo Zegna go up and down completely randomly.
Pair Corralation between G III and Ermenegildo Zegna
Given the investment horizon of 90 days G III Apparel Group is expected to generate 1.1 times more return on investment than Ermenegildo Zegna. However, G III is 1.1 times more volatile than Ermenegildo Zegna NV. It trades about 0.02 of its potential returns per unit of risk. Ermenegildo Zegna NV is currently generating about -0.05 per unit of risk. If you would invest 2,882 in G III Apparel Group on August 24, 2024 and sell it today you would earn a total of 40.00 from holding G III Apparel Group or generate 1.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
G III Apparel Group vs. Ermenegildo Zegna NV
Performance |
| Timeline |
| G III Apparel |
| Ermenegildo Zegna |
G III and Ermenegildo Zegna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G III and Ermenegildo Zegna
The main advantage of trading using opposite G III and Ermenegildo Zegna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G III position performs unexpectedly, Ermenegildo Zegna 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 Ermenegildo Zegna will offset losses from the drop in Ermenegildo Zegna's long position.The idea behind G III Apparel Group and Ermenegildo Zegna NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Ermenegildo Zegna vs. Oxford Industries | Ermenegildo Zegna vs. G III Apparel Group | Ermenegildo Zegna vs. Kontoor Brands | Ermenegildo Zegna vs. Columbia Sportswear |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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