Correlation Between G-III Apparel and H+M HEN+MAUUNSPADR

Can any of the company-specific risk be diversified away by investing in both G-III Apparel and H+M HEN+MAUUNSPADR 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 H+M HEN+MAUUNSPADR 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 HM HENMAUUNSPADR 15, you can compare the effects of market volatilities on G-III Apparel and H+M HEN+MAUUNSPADR 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 H+M HEN+MAUUNSPADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of G-III Apparel and H+M HEN+MAUUNSPADR.

Diversification Opportunities for G-III Apparel and H+M HEN+MAUUNSPADR

0.46

Correlation Coefficient

G-III Apparel  H+M HEN+MAUUNSPADR

Very weak diversification

The 3 months correlation between G-III and H+M is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and HM HENMAUUNSPADR 15 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H+M HEN+MAUUNSPADR 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 H+M HEN+MAUUNSPADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H+M HEN+MAUUNSPADR has no effect on the direction of G-III Apparel i.e., G-III Apparel and H+M HEN+MAUUNSPADR go up and down completely randomly.

Pair Corralation between G-III Apparel and H+M HEN+MAUUNSPADR

Assuming the 90 days horizon G III Apparel Group is expected to under-perform the H+M HEN+MAUUNSPADR. In addition to that, G-III Apparel is 1.12 times more volatile than HM HENMAUUNSPADR 15. It trades about -0.15 of its total potential returns per unit of risk. HM HENMAUUNSPADR 15 is currently generating about -0.04 per unit of volatility. If you would invest  256.00  in HM HENMAUUNSPADR 15 on December 28, 2024 and sell it today you would lose (14.00) from holding HM HENMAUUNSPADR 15 or give up 5.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

G III Apparel Group  vs.  HM HENMAUUNSPADR 15

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 fragile 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.

H+M HEN+MAUUNSPADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days HM HENMAUUNSPADR 15 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, H+M HEN+MAUUNSPADR is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with G-III Apparel and H+M HEN+MAUUNSPADR

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

The idea behind G III Apparel Group and HM HENMAUUNSPADR 15 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.