Correlation Between G III and Prosus NV
Can any of the company-specific risk be diversified away by investing in both G III and Prosus NV 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 and Prosus NV 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 Prosus NV, you can compare the effects of market volatilities on G III and Prosus NV 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 with a short position of Prosus NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of G III and Prosus NV.
Diversification Opportunities for G III and Prosus NV
Good diversification
The 3 months correlation between GI4 and Prosus is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and Prosus NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosus NV and G III 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 Prosus NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosus NV has no effect on the direction of G III i.e., G III and Prosus NV go up and down completely randomly.
Pair Corralation between G III and Prosus NV
Assuming the 90 days horizon G III is expected to generate 3.15 times less return on investment than Prosus NV. In addition to that, G III is 1.21 times more volatile than Prosus NV. It trades about 0.06 of its total potential returns per unit of risk. Prosus NV is currently generating about 0.21 per unit of volatility. If you would invest 3,202 in Prosus NV on September 12, 2024 and sell it today you would earn a total of 842.00 from holding Prosus NV or generate 26.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
G III Apparel Group vs. Prosus NV
Performance |
Timeline |
G III Apparel |
Prosus NV |
G III and Prosus NV Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with G III and Prosus NV
The main advantage of trading using opposite G III and Prosus NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G III position performs unexpectedly, Prosus NV 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 Prosus NV will offset losses from the drop in Prosus NV's long position.G III vs. Strategic Education | G III vs. Magic Software Enterprises | G III vs. IDP EDUCATION LTD | G III vs. TAL Education Group |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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