Correlation Between G-III APPAREL and SOLSTAD OFFSHORE

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

By analyzing existing cross correlation between G III APPAREL GROUP and SOLSTAD OFFSHORE NK, you can compare the effects of market volatilities on G-III APPAREL and SOLSTAD OFFSHORE 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 G-III APPAREL with a short position of SOLSTAD OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of G-III APPAREL and SOLSTAD OFFSHORE.

Diversification Opportunities for G-III APPAREL and SOLSTAD OFFSHORE

0.69

Correlation Coefficient

G-III APPAREL  SOLSTAD OFFSHORE

Poor diversification

The 3 months correlation between G-III and SOLSTAD is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding G III APPAREL GROUP and SOLSTAD OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOLSTAD OFFSHORE and G-III APPAREL 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 G III APPAREL GROUP are associated (or correlated) with SOLSTAD OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOLSTAD OFFSHORE has no effect on the direction of G-III APPAREL i.e., G-III APPAREL and SOLSTAD OFFSHORE go up and down completely randomly.

Pair Corralation between G-III APPAREL and SOLSTAD OFFSHORE

Assuming the 90 days trading horizon G III APPAREL GROUP is expected to under-perform the SOLSTAD OFFSHORE. But the stock apears to be less risky and, when comparing its historical volatility, G III APPAREL GROUP is 1.11 times less risky than SOLSTAD OFFSHORE. The stock trades about -0.2 of its potential returns per unit of risk. The SOLSTAD OFFSHORE NK is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  337.00  in SOLSTAD OFFSHORE NK on December 21, 2024 and sell it today you would lose (24.00) from holding SOLSTAD OFFSHORE NK or give up 7.12% of portfolio value over 90 days.

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

G III APPAREL GROUP  vs.  SOLSTAD OFFSHORE NK

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 uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

SOLSTAD OFFSHORE

Risk-Adjusted Performance

Very Weak

Over the last 90 days SOLSTAD OFFSHORE NK has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with G-III APPAREL and SOLSTAD OFFSHORE

The main advantage of trading using opposite G-III APPAREL and SOLSTAD OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G-III APPAREL position performs unexpectedly, SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE will offset losses from the drop in SOLSTAD OFFSHORE's long position.

The idea behind G III APPAREL GROUP and SOLSTAD OFFSHORE NK 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.