Correlation Between Japan Asia and G-III Apparel
Can any of the company-specific risk be diversified away by investing in both Japan Asia and G-III Apparel 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 Japan Asia and G-III Apparel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Asia Investment and G III Apparel Group, you can compare the effects of market volatilities on Japan Asia and G-III Apparel 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 Japan Asia with a short position of G-III Apparel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Asia and G-III Apparel.
Diversification Opportunities for Japan Asia and G-III Apparel
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Japan and G-III is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment 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 Japan Asia 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 Japan Asia Investment are associated (or correlated) with G-III Apparel. 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 Japan Asia i.e., Japan Asia and G-III Apparel go up and down completely randomly.
Pair Corralation between Japan Asia and G-III Apparel
Assuming the 90 days horizon Japan Asia Investment is expected to under-perform the G-III Apparel. But the stock apears to be less risky and, when comparing its historical volatility, Japan Asia Investment is 1.78 times less risky than G-III Apparel. The stock trades about -0.12 of its potential returns per unit of risk. The G III Apparel Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,020 in G III Apparel Group on October 11, 2024 and sell it today you would earn a total of 80.00 from holding G III Apparel Group or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Asia Investment vs. G III Apparel Group
Performance |
| Timeline |
| Japan Asia Investment |
| G III Apparel |
Japan Asia and G-III Apparel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Asia and G-III Apparel
The main advantage of trading using opposite Japan Asia and G-III Apparel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia position performs unexpectedly, G-III Apparel 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 Apparel will offset losses from the drop in G-III Apparel's long position.| Japan Asia vs. BOS BETTER ONLINE | Japan Asia vs. CARSALESCOM | Japan Asia vs. MUTUIONLINE | Japan Asia vs. NEWELL RUBBERMAID |
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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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