Correlation Between CHIBA BANK and G III

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

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

Diversification Opportunities for CHIBA BANK and G III

-0.7

Correlation Coefficient

CHIBA BANK  G III

Excellent diversification

The 3 months correlation between CHIBA and GI4 is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding CHIBA BANK 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 CHIBA BANK 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 CHIBA BANK 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 CHIBA BANK i.e., CHIBA BANK and G III go up and down completely randomly.

Pair Corralation between CHIBA BANK and G III

Assuming the 90 days trading horizon CHIBA BANK is expected to generate 0.72 times more return on investment than G III. However, CHIBA BANK is 1.38 times less risky than G III. It trades about 0.27 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  725.00  in CHIBA BANK on December 20, 2024 and sell it today you would earn a total of  185.00  from holding CHIBA BANK or generate 25.52% return on investment over 90 days.

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

CHIBA BANK  vs.  G III Apparel Group

CHIBA BANK

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CHIBA BANK are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, CHIBA BANK exhibited 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. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with CHIBA BANK and G III

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

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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.