Correlation Between Gildan Activewear and Brilliant Earth
Can any of the company-specific risk be diversified away by investing in both Gildan Activewear and Brilliant Earth 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 Gildan Activewear and Brilliant Earth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gildan Activewear and Brilliant Earth Group, you can compare the effects of market volatilities on Gildan Activewear and Brilliant Earth 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 Gildan Activewear with a short position of Brilliant Earth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gildan Activewear and Brilliant Earth.
Diversification Opportunities for Gildan Activewear and Brilliant Earth
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gildan and Brilliant is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Gildan Activewear and Brilliant Earth Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brilliant Earth Group and Gildan Activewear 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 Gildan Activewear are associated (or correlated) with Brilliant Earth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brilliant Earth Group has no effect on the direction of Gildan Activewear i.e., Gildan Activewear and Brilliant Earth go up and down completely randomly.
Pair Corralation between Gildan Activewear and Brilliant Earth
Considering the 90-day investment horizon Gildan Activewear is expected to generate 0.21 times more return on investment than Brilliant Earth. However, Gildan Activewear is 4.74 times less risky than Brilliant Earth. It trades about 0.14 of its potential returns per unit of risk. Brilliant Earth Group is currently generating about -0.06 per unit of risk. If you would invest 4,697 in Gildan Activewear on August 30, 2024 and sell it today you would earn a total of 259.00 from holding Gildan Activewear or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gildan Activewear vs. Brilliant Earth Group
Performance |
| Timeline |
| Gildan Activewear |
| Brilliant Earth Group |
Gildan Activewear and Brilliant Earth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gildan Activewear and Brilliant Earth
The main advantage of trading using opposite Gildan Activewear and Brilliant Earth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gildan Activewear position performs unexpectedly, Brilliant Earth 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 Brilliant Earth will offset losses from the drop in Brilliant Earth's long position.| Gildan Activewear vs. VF Corporation | Gildan Activewear vs. Levi Strauss Co | Gildan Activewear vs. Under Armour A | Gildan Activewear vs. Columbia Sportswear |
| Brilliant Earth vs. Capri Holdings | Brilliant Earth vs. Movado Group | Brilliant Earth vs. Tapestry | Brilliant Earth vs. TheRealReal |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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