Correlation Between NYSE Composite and Gildan Activewear
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Gildan Activewear 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 NYSE Composite and Gildan Activewear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Gildan Activewear, you can compare the effects of market volatilities on NYSE Composite and Gildan Activewear 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 NYSE Composite with a short position of Gildan Activewear. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Gildan Activewear.
Diversification Opportunities for NYSE Composite and Gildan Activewear
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Gildan is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Gildan Activewear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gildan Activewear and NYSE Composite 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 NYSE Composite are associated (or correlated) with Gildan Activewear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gildan Activewear has no effect on the direction of NYSE Composite i.e., NYSE Composite and Gildan Activewear go up and down completely randomly.
Pair Corralation between NYSE Composite and Gildan Activewear
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.17 times less return on investment than Gildan Activewear. But when comparing it to its historical volatility, NYSE Composite is 1.42 times less risky than Gildan Activewear. It trades about 0.21 of its potential returns per unit of risk. Gildan Activewear is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 4,819 in Gildan Activewear on August 27, 2024 and sell it today you would earn a total of 164.00 from holding Gildan Activewear or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Gildan Activewear
Performance |
| Timeline |
NYSE Composite and Gildan Activewear Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Gildan Activewear
Pair trading matchups for Gildan Activewear
Pair Trading with NYSE Composite and Gildan Activewear
The main advantage of trading using opposite NYSE Composite and Gildan Activewear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Gildan Activewear 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 Gildan Activewear will offset losses from the drop in Gildan Activewear's long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Gildan Activewear vs. Vince Holding Corp | Gildan Activewear vs. Ermenegildo Zegna NV | Gildan Activewear vs. Columbia Sportswear | Gildan Activewear vs. G III Apparel Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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