Correlation Between G III and CONSOL Energy

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

Diversification Opportunities for G III and CONSOL Energy

-0.16

Correlation Coefficient

G III  CONSOL Energy

Good diversification

The 3 months correlation between GI4 and CONSOL is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and CONSOL Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSOL Energy 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 CONSOL Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONSOL Energy has no effect on the direction of G III i.e., G III and CONSOL Energy go up and down completely randomly.

Pair Corralation between G III and CONSOL Energy

Assuming the 90 days trading horizon G III Apparel Group is expected to generate 0.87 times more return on investment than CONSOL Energy. However, G III Apparel Group is 1.16 times less risky than CONSOL Energy. It trades about 0.06 of its potential returns per unit of risk. CONSOL Energy is currently generating about -0.01 per unit of risk. If you would invest  2,780  in G III Apparel Group on October 25, 2024 and sell it today you would earn a total of  200.00  from holding G III Apparel Group or generate 7.19% 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.  CONSOL Energy

G III Apparel

Risk-Adjusted Performance

4 of 100

Insignificant

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. In spite of comparatively fragile basic indicators, G III may actually be approaching a critical reversion point that can send shares even higher in February 2025.

CONSOL Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CONSOL Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CONSOL Energy is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with G III and CONSOL Energy

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

The idea behind G III Apparel Group and CONSOL Energy 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.