Correlation Between G-III Apparel and Air Liquide

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

Diversification Opportunities for G-III Apparel and Air Liquide

-0.49

Correlation Coefficient

G-III Apparel  Air Liquide

Very good diversification

The 3 months correlation between G-III and Air is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and Air Liquide SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Liquide SA 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 Air Liquide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Liquide SA has no effect on the direction of G-III Apparel i.e., G-III Apparel and Air Liquide go up and down completely randomly.

Pair Corralation between G-III Apparel and Air Liquide

Assuming the 90 days trading horizon G III Apparel Group is expected to generate 2.7 times more return on investment than Air Liquide. However, G-III Apparel is 2.7 times more volatile than Air Liquide SA. It trades about 0.02 of its potential returns per unit of risk. Air Liquide SA is currently generating about 0.01 per unit of risk. If you would invest  2,900  in G III Apparel Group on October 9, 2024 and sell it today you would earn a total of  220.00  from holding G III Apparel Group or generate 7.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

G III Apparel Group  vs.  Air Liquide SA

G III Apparel

Risk-Adjusted Performance

6 of 100

OK

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 Apparel unveiled solid returns over the last few months and may actually be approaching a breakup point.

Air Liquide SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Air Liquide SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with G-III Apparel and Air Liquide

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

The idea behind G III Apparel Group and Air Liquide SA 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.