Correlation Between Summit Therapeutics and G III
Can any of the company-specific risk be diversified away by investing in both Summit Therapeutics 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 Summit Therapeutics and G III into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Therapeutics PLC and G III Apparel Group, you can compare the effects of market volatilities on Summit Therapeutics 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 Summit Therapeutics with a short position of G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Therapeutics and G III.
Diversification Opportunities for Summit Therapeutics and G III
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Summit and GIII is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Summit Therapeutics PLC 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 Summit Therapeutics 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 Summit Therapeutics PLC 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 Summit Therapeutics i.e., Summit Therapeutics and G III go up and down completely randomly.
Pair Corralation between Summit Therapeutics and G III
Given the investment horizon of 90 days Summit Therapeutics PLC is expected to generate 2.8 times more return on investment than G III. However, Summit Therapeutics is 2.8 times more volatile than G III Apparel Group. It trades about 0.1 of its potential returns per unit of risk. G III Apparel Group is currently generating about -0.2 per unit of risk. If you would invest 1,787 in Summit Therapeutics PLC on October 21, 2024 and sell it today you would earn a total of 116.00 from holding Summit Therapeutics PLC or generate 6.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Therapeutics PLC vs. G III Apparel Group
Performance |
| Timeline |
| Summit Therapeutics PLC |
| G III Apparel |
Summit Therapeutics and G III Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Therapeutics and G III
The main advantage of trading using opposite Summit Therapeutics and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Therapeutics 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.| Summit Therapeutics vs. Nkarta Inc | Summit Therapeutics vs. Cullinan Oncology LLC | Summit Therapeutics vs. Kezar Life Sciences | Summit Therapeutics vs. Kronos Bio |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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