Correlation Between Kontoor Brands and G III
Can any of the company-specific risk be diversified away by investing in both Kontoor Brands 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 Kontoor Brands and G III into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kontoor Brands and G III Apparel Group, you can compare the effects of market volatilities on Kontoor Brands 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 Kontoor Brands with a short position of G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kontoor Brands and G III.
Diversification Opportunities for Kontoor Brands and G III
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kontoor and GIII is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Kontoor Brands 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 Kontoor Brands 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 Kontoor Brands 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 Kontoor Brands i.e., Kontoor Brands and G III go up and down completely randomly.
Pair Corralation between Kontoor Brands and G III
Considering the 90-day investment horizon Kontoor Brands is expected to generate 2.01 times more return on investment than G III. However, Kontoor Brands is 2.01 times more volatile than G III Apparel Group. It trades about 0.2 of its potential returns per unit of risk. G III Apparel Group is currently generating about -0.15 per unit of risk. If you would invest 7,752 in Kontoor Brands on August 24, 2024 and sell it today you would earn a total of 1,033 from holding Kontoor Brands or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kontoor Brands vs. G III Apparel Group
Performance |
| Timeline |
| Kontoor Brands |
| G III Apparel |
Kontoor Brands and G III Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kontoor Brands and G III
The main advantage of trading using opposite Kontoor Brands and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kontoor Brands 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.| Kontoor Brands vs. Vince Holding Corp | Kontoor Brands vs. Ermenegildo Zegna NV | Kontoor Brands vs. Columbia Sportswear | Kontoor Brands vs. Gildan Activewear |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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