Correlation Between G III and Aurubis AG

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

Diversification Opportunities for G III and Aurubis AG

0.3

Correlation Coefficient

G III  Aurubis AG

Weak diversification

The 3 months correlation between GI4 and Aurubis is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and Aurubis AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurubis AG 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 Aurubis AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurubis AG has no effect on the direction of G III i.e., G III and Aurubis AG go up and down completely randomly.

Pair Corralation between G III and Aurubis AG

Assuming the 90 days trading horizon G III Apparel Group is expected to generate 0.91 times more return on investment than Aurubis AG. However, G III Apparel Group is 1.09 times less risky than Aurubis AG. It trades about 0.06 of its potential returns per unit of risk. Aurubis AG is currently generating about 0.05 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 Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

G III Apparel Group  vs.  Aurubis AG

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.

Aurubis AG

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aurubis AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Aurubis AG may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with G III and Aurubis AG

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

The idea behind G III Apparel Group and Aurubis AG 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 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..