Correlation Between Metro AG and G III

Can any of the company-specific risk be diversified away by investing in both Metro AG 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 Metro AG and G III into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Metro AG and G III Apparel Group, you can compare the effects of market volatilities on Metro AG 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 Metro AG with a short position of G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro AG and G III.

Diversification Opportunities for Metro AG and G III

-0.8

Correlation Coefficient

Metro AG  G III

Pay attention - limited upside

The 3 months correlation between Metro and GI4 is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Metro AG 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 Metro AG 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 Metro AG 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 Metro AG i.e., Metro AG and G III go up and down completely randomly.

Pair Corralation between Metro AG and G III

Assuming the 90 days trading horizon Metro AG is expected to generate 2.04 times more return on investment than G III. However, Metro AG is 2.04 times more volatile than G III Apparel Group. It trades about 0.13 of its potential returns per unit of risk. G III Apparel Group is currently generating about -0.21 per unit of risk. If you would invest  399.00  in Metro AG on December 22, 2024 and sell it today you would earn a total of  135.00  from holding Metro AG or generate 33.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Metro AG  vs.  G III Apparel Group

Metro AG

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Metro AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental drivers, Metro AG unveiled solid returns over the last few months and may actually be approaching a breakup point.

G III Apparel

Risk-Adjusted Performance

Very Weak

Over the last 90 days G III Apparel Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Metro AG and G III

The main advantage of trading using opposite Metro AG and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro AG 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.

The idea behind Metro AG and G III Apparel Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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.