Correlation Between H M and G III
Can any of the company-specific risk be diversified away by investing in both H M and G III 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 H M and G III into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H M Hennes and G III Apparel Group, you can compare the effects of market volatilities on H M and G III 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 H M with a short position of G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of H M and G III.
Diversification Opportunities for H M and G III
Modest diversification
The 3 months correlation between HMRZF and GIII is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding H M Hennes and G III Apparel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G III Apparel and H M 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 H M Hennes are associated (or correlated) with G III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G III Apparel has no effect on the direction of H M i.e., H M and G III go up and down completely randomly.
Pair Corralation between H M and G III
Assuming the 90 days horizon H M Hennes is expected to under-perform the G III. In addition to that, H M is 1.11 times more volatile than G III Apparel Group. It trades about -0.01 of its total potential returns per unit of risk. G III Apparel Group is currently generating about 0.02 per unit of volatility. If you would invest 2,917 in G III Apparel Group on August 27, 2024 and sell it today you would earn a total of 94.00 from holding G III Apparel Group or generate 3.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 65.73% |
| Values | Daily Returns |
H M Hennes vs. G III Apparel Group
Performance |
| Timeline |
| H M Hennes |
| G III Apparel |
H M and G III Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H M and G III
The main advantage of trading using opposite H M and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H M position performs unexpectedly, G III 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 G III will offset losses from the drop in G III's long position.The idea behind H M Hennes and G III Apparel Group 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.| G III vs. Oxford Industries | G III vs. Ermenegildo Zegna NV | G III vs. Kontoor Brands | G III 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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