Correlation Between Hilltop Holdings and G III
Can any of the company-specific risk be diversified away by investing in both Hilltop Holdings 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 Hilltop Holdings and G III into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hilltop Holdings and G III Apparel Group, you can compare the effects of market volatilities on Hilltop Holdings 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 Hilltop Holdings with a short position of G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilltop Holdings and G III.
Diversification Opportunities for Hilltop Holdings and G III
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hilltop and GI4 is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hilltop Holdings 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 Hilltop Holdings 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 Hilltop Holdings 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 Hilltop Holdings i.e., Hilltop Holdings and G III go up and down completely randomly.
Pair Corralation between Hilltop Holdings and G III
Assuming the 90 days horizon Hilltop Holdings is expected to generate 5.72 times less return on investment than G III. But when comparing it to its historical volatility, Hilltop Holdings is 1.69 times less risky than G III. It trades about 0.03 of its potential returns per unit of risk. G III Apparel Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,160 in G III Apparel Group on November 3, 2024 and sell it today you would earn a total of 980.00 from holding G III Apparel Group or generate 45.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilltop Holdings vs. G III Apparel Group
Performance |
| Timeline |
| Hilltop Holdings |
| G III Apparel |
Hilltop Holdings and G III Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilltop Holdings and G III
The main advantage of trading using opposite Hilltop Holdings and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilltop Holdings 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.| Hilltop Holdings vs. Cal Maine Foods | Hilltop Holdings vs. Columbia Sportswear | Hilltop Holdings vs. SENECA FOODS A | Hilltop Holdings vs. Austevoll Seafood ASA |
| G III vs. US FOODS HOLDING | G III vs. PREMIER FOODS | G III vs. United Natural Foods | G III vs. LIFEWAY FOODS |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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