Correlation Between G III and Strix Group

Can any of the company-specific risk be diversified away by investing in both G III and Strix Group 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 Strix Group 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 Strix Group Plc, you can compare the effects of market volatilities on G III and Strix Group 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 Strix Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of G III and Strix Group.

Diversification Opportunities for G III and Strix Group

-0.37

Correlation Coefficient

G III  Strix Group

Very good diversification

The 3 months correlation between GI4 and Strix is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and Strix Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strix Group Plc 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 Strix Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strix Group Plc has no effect on the direction of G III i.e., G III and Strix Group go up and down completely randomly.

Pair Corralation between G III and Strix Group

Assuming the 90 days horizon G III Apparel Group is expected to generate 0.75 times more return on investment than Strix Group. However, G III Apparel Group is 1.33 times less risky than Strix Group. It trades about 0.06 of its potential returns per unit of risk. Strix Group Plc is currently generating about -0.28 per unit of risk. If you would invest  2,780  in G III Apparel Group on September 12, 2024 and sell it today you would earn a total of  180.00  from holding G III Apparel Group or generate 6.47% 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.  Strix Group Plc

G III Apparel

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in G III Apparel Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, G III may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Strix Group Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strix Group Plc 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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with G III and Strix Group

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

The idea behind G III Apparel Group and Strix Group Plc 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.