Correlation Between QUEEN S and G III
Can any of the company-specific risk be diversified away by investing in both QUEEN S 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 QUEEN S and G III into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QUEEN S ROAD and G III Apparel Group, you can compare the effects of market volatilities on QUEEN S 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 QUEEN S with a short position of G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of QUEEN S and G III.
Diversification Opportunities for QUEEN S and G III
Poor diversification
The 3 months correlation between QUEEN and GI4 is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding QUEEN S ROAD 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 QUEEN S 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 QUEEN S ROAD 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 QUEEN S i.e., QUEEN S and G III go up and down completely randomly.
Pair Corralation between QUEEN S and G III
Assuming the 90 days horizon QUEEN S ROAD is expected to generate 1.08 times more return on investment than G III. However, QUEEN S is 1.08 times more volatile than G III Apparel Group. It trades about -0.14 of its potential returns per unit of risk. G III Apparel Group is currently generating about -0.23 per unit of risk. If you would invest 466.00 in QUEEN S ROAD on December 20, 2024 and sell it today you would lose (84.00) from holding QUEEN S ROAD or give up 18.03% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 96.67% |
Values | Daily Returns |
QUEEN S ROAD vs. G III Apparel Group
Performance |
Timeline |
QUEEN S ROAD |
G III Apparel |
QUEEN S and G III Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with QUEEN S and G III
The main advantage of trading using opposite QUEEN S and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QUEEN S 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.QUEEN S vs. Compugroup Medical SE | QUEEN S vs. NAKED WINES PLC | QUEEN S vs. MeVis Medical Solutions | QUEEN S vs. GungHo Online Entertainment |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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