Correlation Between Sanyo Chemical and G-III Apparel
Can any of the company-specific risk be diversified away by investing in both Sanyo Chemical 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 Sanyo Chemical 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 Sanyo Chemical Industries and G III Apparel Group, you can compare the effects of market volatilities on Sanyo Chemical 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 Sanyo Chemical with a short position of G-III Apparel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanyo Chemical and G-III Apparel.
Diversification Opportunities for Sanyo Chemical and G-III Apparel
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sanyo and G-III is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sanyo Chemical Industries 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 Sanyo Chemical 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 Sanyo Chemical Industries 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 Sanyo Chemical i.e., Sanyo Chemical and G-III Apparel go up and down completely randomly.
Pair Corralation between Sanyo Chemical and G-III Apparel
Assuming the 90 days horizon Sanyo Chemical is expected to generate 6.3 times less return on investment than G-III Apparel. But when comparing it to its historical volatility, Sanyo Chemical Industries is 2.44 times less risky than G-III Apparel. It trades about 0.01 of its potential returns per unit of risk. G III Apparel Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,640 in G III Apparel Group on September 3, 2024 and sell it today you would earn a total of 160.00 from holding G III Apparel Group or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanyo Chemical Industries vs. G III Apparel Group
Performance |
| Timeline |
| Sanyo Chemical Industries |
| G III Apparel |
Sanyo Chemical and G-III Apparel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanyo Chemical and G-III Apparel
The main advantage of trading using opposite Sanyo Chemical and G-III Apparel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanyo Chemical 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.| Sanyo Chemical vs. X FAB Silicon Foundries | Sanyo Chemical vs. Quaker Chemical | Sanyo Chemical vs. Mitsubishi Gas Chemical | Sanyo Chemical vs. Shin Etsu Chemical Co |
| G-III Apparel vs. Sanyo Chemical Industries | G-III Apparel vs. MCEWEN MINING INC | G-III Apparel vs. AIR PRODCHEMICALS | G-III Apparel vs. FIREWEED METALS P |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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