Correlation Between DICKS Sporting and G III

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both DICKS Sporting 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 DICKS Sporting and G III into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DICKS Sporting Goods and G III Apparel Group, you can compare the effects of market volatilities on DICKS Sporting 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 DICKS Sporting with a short position of G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of DICKS Sporting and G III.

Diversification Opportunities for DICKS Sporting and G III

0.73
  Correlation Coefficient

Poor diversification

The 3 months correlation between DICKS and GI4 is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding DICKS Sporting Goods 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 DICKS Sporting 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 DICKS Sporting Goods 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 DICKS Sporting i.e., DICKS Sporting and G III go up and down completely randomly.

Pair Corralation between DICKS Sporting and G III

Assuming the 90 days horizon DICKS Sporting is expected to generate 1.36 times less return on investment than G III. But when comparing it to its historical volatility, DICKS Sporting Goods is 1.1 times less risky than G III. It trades about 0.14 of its potential returns per unit of risk. G III Apparel Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  2,880  in G III Apparel Group on September 23, 2024 and sell it today you would earn a total of  340.00  from holding G III Apparel Group or generate 11.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

DICKS Sporting Goods  vs.  G III Apparel Group

 Performance 
       Timeline  
DICKS Sporting Goods 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in DICKS Sporting Goods are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, DICKS Sporting may actually be approaching a critical reversion point that can send shares even higher in January 2025.
G III Apparel 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in G III Apparel Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, G III unveiled solid returns over the last few months and may actually be approaching a breakup point.

DICKS Sporting and G III Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with DICKS Sporting and G III

The main advantage of trading using opposite DICKS Sporting and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DICKS Sporting 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 DICKS Sporting Goods 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

Other Complementary Tools

Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Fundamental Analysis
View fundamental data based on most recent published financial statements
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges