Correlation Between Gildan Activewear and Childrens Place
Can any of the company-specific risk be diversified away by investing in both Gildan Activewear and Childrens Place 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 Childrens Place into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gildan Activewear and Childrens Place, you can compare the effects of market volatilities on Gildan Activewear and Childrens Place 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 Childrens Place. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gildan Activewear and Childrens Place.
Diversification Opportunities for Gildan Activewear and Childrens Place
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gildan and Childrens is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Gildan Activewear and Childrens Place in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Childrens Place 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 Childrens Place. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Childrens Place has no effect on the direction of Gildan Activewear i.e., Gildan Activewear and Childrens Place go up and down completely randomly.
Pair Corralation between Gildan Activewear and Childrens Place
Considering the 90-day investment horizon Gildan Activewear is expected to generate 0.23 times more return on investment than Childrens Place. However, Gildan Activewear is 4.29 times less risky than Childrens Place. It trades about 0.41 of its potential returns per unit of risk. Childrens Place is currently generating about 0.09 per unit of risk. If you would invest 4,698 in Gildan Activewear on November 9, 2024 and sell it today you would earn a total of 495.00 from holding Gildan Activewear or generate 10.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gildan Activewear vs. Childrens Place
Performance |
| Timeline |
| Gildan Activewear |
| Childrens Place |
Gildan Activewear and Childrens Place Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gildan Activewear and Childrens Place
The main advantage of trading using opposite Gildan Activewear and Childrens Place positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gildan Activewear position performs unexpectedly, Childrens Place 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 Childrens Place will offset losses from the drop in Childrens Place's long position.| Gildan Activewear vs. Vince Holding Corp | Gildan Activewear vs. Ermenegildo Zegna NV | Gildan Activewear vs. Columbia Sportswear | Gildan Activewear vs. G III Apparel Group |
| Childrens Place vs. Ross Stores | Childrens Place vs. Buckle Inc | Childrens Place vs. Guess Inc | Childrens Place vs. Abercrombie Fitch |
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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